TD Cowen Maintains Starbucks (SBUX) Price Target, Downgrades Rating

Starbucks Corporation (NASDAQ:SBUX) was downgraded by TD Cowen on May 29 from Buy to Hold, with the firm maintaining its $90 price target. The move reflects growing skepticism about the coffee giant’s near-to-midterm earnings trajectory and ongoing turnaround efforts. In its note to investors, TD Cowen pointed to a mismatch between Wall Street expectations and what the firm believes is a more realistic earnings base for 2026 through 2028. The analysis incorporates Starbucks’ increased labor investments—an area the firm believes consensus estimates have largely overlooked.

“These labor costs are central to Starbucks’ long-term recovery strategy,” the note stated, “but they also place downward pressure on near-term profitability.” TD Cowen also flagged several external risks, including a shift in consumer perception around value, historical weakness during economic downturns, and intensified competition in the quick-service coffee space. These factors, the firm believes, could delay a return to normalized same-store-sales growth.

In addition to operational headwinds, the firm noted that Starbucks Corporation (NASDAQ:SBUX) shares are currently trading at a premium to historical earnings multiples, adding another layer of caution to its downgrade. TD Cowen’s revised outlook underscores the complexity of Starbucks’ turnaround, which aims to balance wage improvements, operational changes, and customer experience enhancements.

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