Key Stats for Starbucks Stock
- Price change for Starbucks stock in last 6 months: 6%
- $SBUX Stock Price as of Oct. 8: $153
- 52-Week High: $330
- $SBUX Stock Price Target: $243
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What Happened?
The Financial Times reported that Starbucks (SBUX) has explored a takeover of Chipotle Mexican Grill.
The company reportedly worked with advisers in recent months. It’s unclear whether Starbucks made a formal offer. The report also warned the deal may never happen.
If it did, it would be the biggest restaurant deal ever. It would top Burger King’s $11.4 billion purchase of Tim Hortons in 2014. Together, the two companies had almost $50 billion in sales last year.
CEO Brian Niccol ran Chipotle for about six years before joining Starbucks in 2024. Chipotle’s stock has nearly halved since he left.
Starbucks wouldn’t comment on rumors. It said it is “laser focused” on its turnaround and has strong momentum. Chipotle didn’t respond to requests for comment.
Starbucks stock dropped as much as 6.7% after the news. It then recovered, closing nearly flat. Chipotle shares jumped about 6%.
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What the Market Is Telling Us About Starbucks Stock
Investors seem unsure about the deal. Some analysts say Chipotle holders would like Niccol coming back.
But many question why Starbucks would want to buy another brand. One William Blair analyst saw no obvious revenue gains from combining the two.
Cost is another worry. An eToro strategist said a deal could require heavy borrowing or share issuance. That may make it look like an expensive distraction.
The timing is also awkward. Starbucks is in the middle of its turnaround, and the results are improving.
In Q3, global same-store sales rose 7.9%. Earnings per share jumped about 70%. Management raised its full-year EPS guidance to $2.55-$2.65.
But margins haven’t fully recovered. The 14.4% Q3 operating margin was well below 16.7% two years ago, according to LSEG data.
Starbucks has also committed at least $500 million to labor investments. That is why some say Starbucks stock needs to prove the turnaround first.
Some see upside for Chipotle. It has about 100 locations outside the U.S. Niccol could use Starbucks’ licensed partners in Europe to help it expand faster.
Starbucks said it will report Q4 results and its outlook for next year later this month. Until then, Starbucks stock will likely trade on whether the company can keep its turnaround on track.
Any new details on a Chipotle deal could also move Starbucks stock.
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So what is Starbucks stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
