Key Stats for Starbucks Stock
- Price change for Starbucks stock in last 6 months: -5%
- $SBUX Stock Price as of Oct. 12: $92
- 52-Week High: $111
- $SBUX Stock Price Target: $111
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What Happened?
Starbucks (SBUX) said on Monday that it will not acquire Chipotle (CMG). A spokesperson said, “We are not buying Chipotle.”
Starbucks stock rose about 1% in early trading, while Chipotle fell about 4%.
The statement follows an October 8 Financial Times report, which said Starbucks had worked with advisers on a possible bid for Chipotle.
That news sent Chipotle up more than 7% and Starbucks down about 3%.
The deal would have been the largest ever in the restaurant industry and would have created a company with about $50 billion in annual sales.
Chipotle’s market cap is around $40 billion. It would also have reunited Starbucks CEO Brian Niccol with the chain he led for six years.
Many analysts doubted the logic, given that Starbucks is in the middle of a turnaround.
Funding a premium price would likely take debt and new shares. One advisory partner said that could test leverage and dilute shareholders.
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What the Market Is Telling Us About Starbucks Stock
The small move up shows investors are relieved. They did not like the idea of a huge deal during a turnaround. Starbucks stock fell on the rumor and is now rebounding.
Starbucks said management is “laser focused” on its “Back to Starbucks” plan. Its July earnings call shows why that focus matters.
- Global comparable sales grew 7.9% last quarter.
- U.S. comps also rose 7.9%. Transactions were up 4.2%.
- Operating margin rose about 430 basis points to 14.4%.
- Earnings per share grew about 70% to $0.85.
- The company raised its full-year EPS guidance to $2.55-$2.65.
Starbucks also paid down about $1.8 billion of debt last quarter and ended Q2 with a leverage of 2.9x.
A big acquisition would have worked against that progress.
Still, Starbucks stock is up 7.8% this year and trails the S&P 500, which is up almost 15%.
The company is also closing dozens of weak stores. Management said it could close some North American stores as it reviews underperformers.
Starbucks will report Q4 results and its fiscal 2027 outlook later this month. For now, Starbucks stock is back to a simple execution story, not a deal-making one.
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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!
