Starbucks saw its rating cut by Robert W. Baird from “Outperform” to “Neutral,” with the price target slashed to $85 from a previous $114. The move reflects growing concern about the company’s ability to hit its near-term earnings targets, especially given current foot traffic trends and broader consumer spending headwinds.
🚶♂️ Analysts highlighted that to meet Wall Street expectations, $SBUX would need to post a noticeable recovery in same-store sales traffic—a tall order given macroeconomic softness. With inflation still weighing on consumers and spending patterns shifting, the company could face challenges reigniting growth in its core markets.
📉 Economic uncertainty was a driving factor in Baird’s decision, suggesting that even a brand as strong as Starbucks may not be immune to the broader consumer slowdown. This realignment in expectations marks a pivot from earlier optimism, reflecting the reality of softer demand and operational headwinds.
💰 Dividend Fundamentals
💵 Despite the downgrade, Starbucks remains committed to rewarding shareholders. The company recently announced a quarterly cash dividend of $0.61 per share, payable on May 30, 2025—up from $0.57 previously.
📈 That marks another notch in its long-standing dividend growth track record. With a compound annual growth rate of nearly 20% and 59 consecutive quarters of increases, $SBUX remains a reliable income play in the consumer discretionary space.
🧾 While near-term challenges are real, Starbucks’ financial discipline and consistent capital returns offer a silver lining for long-term investors seeking yield and brand resilience.