Here's Why Some Investors Have Growing Expectations for Starbucks Stock Right Now

Core Viewpoint - Starbucks has faced stagnant stock returns over the past five years, but some investors are optimistic about a turnaround under new CEO Brian Niccol, who has a strong operational background [1][2]. Financial Performance - In Q2 2025, Starbucks reported a 2% year-over-year increase in net revenue but a concerning 50% drop in earnings per share (EPS), which Niccol acknowledged as disappointing [3][8]. - The current valuation of Starbucks stock is approximately 2.5 times trailing sales, close to its lowest level in over a decade, indicating that the market has already discounted the stock due to its recent performance [8][10]. Turnaround Plan - Niccol's turnaround plan for Starbucks focuses on providing fast and friendly service in an inviting atmosphere, which is seen as achievable and necessary for improving customer experience [4][6]. - The plan includes scrapping expensive real estate projects inherited from previous management and seeking more cost-effective ways to enhance coffeehouse operations [7]. Management and Execution - Niccol's track record in the restaurant industry is viewed positively, and there is cautious optimism about his ability to drive profitable growth compared to the previous management team [12]. - Recent tests of a new ordering system have shown promising results, with average wait times decreasing by about two minutes, suggesting that operational improvements may be underway [13]. Future Outlook - Starbucks aims to open thousands of new locations in the long term and believes profit margins will improve, which could lead to increased shareholder value [14].