What Could Lift Starbucks Stock

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Starbucks (SBUX) stock returned 21.7% over the past year. Buyers now pay 58.6 times its earnings over the twelve months to June 2026. That multiple sits well above the stock's average of 40.0 at its last 12 fiscal quarter ends, so investors appear to be betting that management's Back to Starbucks turnaround keeps paying off. So which part of Starbucks would have to get better for the shares to keep rising?

Starbucks' Upside Comes From Wider Margins And Higher Sales

The profit Starbucks makes on each sale matters most. In the scenario in the table below, Starbucks shares would be worth about 20.9% more in three years than at the October 22, 2026 close, before dividends. Today's figures appear alongside the scenario's projections three years out.

Retaining more profit from each sale would add the most to that gain, and selling more would add nearly as much.

That margin has started to recover. It was 5.2% over the twelve months to June 2026, up from 3.6% for the twelve months to December 2025. Starbucks' net margin in fiscal Q3 2026 was 11.2%, compared with 5.9% a year earlier, but that quarter included tariff refunds. Management said the refunds largely offset tariffs paid over the first three quarters of fiscal 2026, so it called the year-to-date view more normal. Management also expects to realize $2 billion of gross cost savings through fiscal 2028.

Can Starbucks Keep Growing Store Sales?

So far, yes. Sales at existing coffeehouses in the U.S. grew 7.9% in fiscal Q3 2026, led by 4.2% more transactions. Drinks make up the bulk of what Starbucks sells. Its beverages generated 60.6% of its revenue in fiscal 2025, and management said U.S. revenue from Refreshers grew by double digits in fiscal Q3 2026.

Reported revenue fell 1% in fiscal Q3 2026. Management largely attributed this decline to moving its China stores into a new joint venture that licenses the brand. For the same reason, management expects fiscal 2026 revenue to be flat to slightly higher. In the scenario, revenue grows 5.6% a year. This outpaces growth over the past year and sits above management's guidance for fiscal 2026, so Starbucks would have to keep its store sales growing for three more years.

How Does Starbucks' Upside Change In Different Scenarios?

In each row below, one assumption changes while the others remain as they are in the scenario.

The shares would rise less than Starbucks' earnings because Trefis sets the year-three P/E at 85% of today's. Trefis applies this rule when today's P/E is more than 1.15 times the stock's own average. Starbucks also starts from a margin well below its own average. Over the twelve-month periods ending from July 2023 to March 2026, its net margin averaged 8.7%.

Three years of owning the stock would return nothing, before dividends, if revenue shrank 0.9% a year. This compares with the 4.5% growth Starbucks delivered in the twelve months to June 2026. The same would happen if the net margin stayed at today's 5.2%, or if buyers paid 41.2 times earnings in three years, which is close to the stock's average over its last 12 fiscal quarter ends.

The margin has started to recover, and store sales are still growing even as China drops out of reported revenue. Starbucks' net margin and its U.S. comparable store sales are the figures to watch when the company reports fiscal Q4 2026 results in October 2026.

Does This Mean You Should Act On SBUX?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

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