SBUX Stock Today: January 29 rally as traffic up for the first time in 2 years
SBUX stock jumped on January 29 after SBUX reported its first traffic growth in two years and a revenue beat. Shares spiked to $104.80 intraday before fading to $95.16 on heavy volume. The rebound suggests early progress in CEO Brian Niccol’s turnaround, though an EPS miss and a cautious FY26 EPS view kept expectations in check. With same-store sales back in the green, investors now look to Thursday’s investor day for updates on margins, China strategy, and growth drivers.
Why shares moved after earnings
Starbucks said guest counts finally turned positive for the first time in two years, and U.S. same-store sales returned to growth. Management highlighted faster order throughput and targeted offers that lifted visits, a key goal in the ongoing turnaround under CEO Brian Niccol. Revenue topped expectations, signaling better demand trends despite a soft consumer backdrop. Coverage: source.
While revenue beat forecasts, EPS missed Street estimates, and management kept a cautious tone on FY26 EPS, which kept margins and China performance in focus. Investors expect clarity around store efficiency, cost savings, and international priorities at Thursday’s investor day. The tone supports the view of progress, but not victory. Details: source.
Price action and technical setup
SBUX stock opened at $102.30, ran to $104.80, then closed at $95.16 (low $95.13) versus the prior $95.72. Volume hit 25,682,642, far above the 10,249,318 average. Year to date, shares are up 13.33%. The market cap sits at $108.21 billion. The rally-fade points to active profit taking after a sharp pop, but improved breadth suggests dip buyers remain engaged.
Momentum is constructive but not decisive: RSI 56.74, MACD positive (histogram 0.24), ADX 18.49 shows no strong trend. Shares trade well above the 50-day ($87.31) and 200-day ($87.21) moving averages. With ATR at 2.38, daily swings can be meaningful. We are watching $100 as a psychological pivot and the mid-$80s moving averages as medium-term reference levels.
Fundamentals, valuation, and Street view
Starbucks posts a 22.9% gross margin and 9.7% operating margin (TTM). EPS is $1.63, free cash flow per share $2.14, and the annual dividend is $2.45 (2.56% yield), implying a high 149% payout ratio. Interest coverage is 6.65, with net debt to EBITDA of 4.28. Sustaining the dividend and deleveraging depend on consistent traffic growth and steadier margins.
At $95.16, SBUX trades at 58.4x TTM EPS, 2.94x sales, and 24.22x EV/EBITDA. The Street skews positive: 21 Buy, 13 Hold, 0 Sell (consensus 3.00). Our stock grade is B+ (BUY), while a separate fundamental model screens C (Sell) on valuation, leverage, and negative book equity. Execution must improve to justify the premium.
What to watch at Thursday’s investor day
We are watching updates on China unit economics, store efficiency, and automation to raise throughput. New beverage platforms, loyalty engagement, and pricing strategy also matter. Durable same-store sales and traffic growth will guide the FY26 EPS path. Any cost-savings roadmap and capital allocation plans could reset margin expectations and support a stronger multiple.
Key risks include a softer U.S. consumer, wage and input inflation, and China macro and FX pressure. Execution on speed-of-service and digital order flow remains vital. Dividend coverage versus earnings bears watching, given the high payout ratio. We also monitor cash generation, capex needs for technology upgrades, and the cadence of unit growth.
Final Thoughts
SBUX stock reacted to proof of progress: traffic growth turned positive and revenue beat expectations, a notable shift after two years of declines. Still, the EPS miss and tentative FY26 view keep the bar for execution high. Valuation is premium, so management must show a credible plan on margins, store efficiency, and China to sustain upside. Near term, expect volatility given ATR and active profit taking. Our playbook: listen for investor day targets on traffic, same-store sales, and cost savings; track whether pricing and loyalty can support mix; and use the 50- and 200-day averages as risk markers. For new money, consider scaling in only if the post-event narrative strengthens.
FAQs
Why did SBUX stock rally today?
Shares jumped as Starbucks reported its first traffic growth in two years and a revenue beat, signaling early progress in the turnaround. Investors welcomed improving visits and throughput. The move faded late as traders weighed an EPS miss and a cautious FY26 EPS tone ahead of Thursday’s investor day guidance.
Did Starbucks beat earnings?
The company beat on revenue but missed EPS versus Street estimates. Management struck a cautious stance on FY26 EPS, keeping margins and China performance in focus. That mix sparked an initial rally on better demand, followed by profit taking as investors waited for investor day details on growth and costs.
Is SBUX stock expensive now?
On trailing metrics, valuation is rich: about 58x EPS, 2.94x sales, and 24x EV/EBITDA. Dividend yield is 2.56% with a high 149% payout ratio. To support the multiple, Starbucks needs sustained same-store sales and traffic growth, margin gains, and clear capital allocation. Many investors await investor day before adding.
What should investors watch at Thursday’s investor day?
Focus on China strategy, store efficiency and automation, loyalty engagement, and cost-savings targets. We want a clearer path to FY26 EPS, durable traffic growth, and margin expansion. Updates on capex and dividend priorities matter too. Any credible plan could support the premium valuation and improve conviction in the turnaround.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
