Starbucks (SBUX) is prepared to report earnings on Tuesday and new Chief Financial Officer (CFO) Cathy Smith has her work cut out for her. Smith, a longtime customer of Starbucks, is aware that the coffee chain has fallen from its former glory. Even so, she believes Starbucks can make a comeback and is dedicated to helping CEO Brian Niccol turn the business around.
According to Smith, Starbucks has to prove itself to Wall Street again. The company’s same-store sales have declined in the last four quarters, showing demand for its goods and services is waning. However, the CFO told Fortune, “All brands drift over time,” and that her pattern recognition skills will help her pull SBUX out of its rut.
Smith has the track record to support that claim. She helped Nordstrom with its recovery before the company went private, and did the same with Target (TGT) after it alienated customers with changes and outspoken political stances. These are similar problems to what Starbucks has dealt with, making Smith a strong candidate to help the company correct course.
Don’t Assume Starbucks Will Beat Estimates Tomorrow
While Smith is excited about fixing Starbucks, she’s not been with the company long, meaning investors won’t see the fruits of her labor in its Fiscal Q2 2025 earnings report. The CFO hopes that Starbucks will show its potential with consistent earnings beats during her tenure, winning back the trust of investors after the stock has fallen 33.2% from its all-time high of $126.32 per share in July 2021. Smith believes Starbucks has the potential to bounce back from its recent woes, saying the coffee chain “can be so much more.”
Is SBUX Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Starbucks is Moderate Buy, based on 16 Buy, and nine Hold ratings over the last three months. With that comes an average price target of $103.95, representing a potential 23.57% upside for SBUX stock.
