Starbucks (SBUX) shares continue to slide in today’s trading following the Trump administration’s announcement of a surprising 46% tariff on goods imported from Vietnam, one of the many countries from which the coffee chain sources its beans. While Starbucks imports coffee from over 30 countries, Vietnam plays a significant role in its supply chain. Although the company hasn’t yet revealed how exposed it is to the new tariffs, the market is concerned about rising costs and the growing risks of a U.S. recession affecting consumer spending.
Adding to the pressure, analysts note that Starbucks may have pulled back on using hedges to protect against coffee price spikes. Investors are also increasingly worried about potential backlash against American brands overseas, which could hurt Starbucks’ international sales. These challenges come at a time when the company, under CEO Brian Niccol, had been making progress on its transformation strategy. As a result, that momentum may now be stalled by the uncertainty surrounding tariffs and economic conditions.
Starbucks must now decide whether to raise prices or absorb the added costs, which could significantly impact its profit margins. The stock fell 11.2% on Thursday, and today’s drop brings it to its lowest point in 2025, despite a recent three-month rebound. All eyes will be on the company’s upcoming earnings report, where analysts expect earnings per share of $0.51.
Is Starbucks a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 17 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average SBUX price target of $111.64 per share implies 35.8% upside potential.
