According to CNBC, Starbucks held a key investor day on Thursday, following a mixed quarterly report. The company laid out multi-year targets, aiming for at least 3% global same-store sales growth, at least 5% revenue growth, and earnings per share between $3.35 and $4 by fiscal 2028. CEO Brian Niccol’s “Back to Starbucks” strategy focuses on operational simplicity and service speed, with a goal to make every drink in under four minutes. A standout was U.S. transactions growing for the first time in eight quarters, alongside a record 35.5 million Rewards members. The company also announced a major remodel of its loyalty program, launching a three-tiered structure on March 10. Despite the bullish updates, the stock was down nearly 1% on the day, though it’s up 13% year-to-date.
The Long Game
Here’s the thing about Starbucks’ new targets: they’re not exactly a moonshot. A 3% same-store sales growth goal for 2028? That’s basically the definition of steady, modest growth. The earnings per share range brackets the current analyst consensus of $3.41. So what management is really saying is, “We’re getting back on track to do what everyone expected us to do anyway, just a few years later.” The operating margin target of 13.5% to 15% is the more telling figure—it shows the focus is on efficiency and extracting more profit from each store. That’s the core of Niccol’s playbook, and it’s a sensible one. But it’s a grind, not a magic trick.
The Rewards Remodel Reality
The revamped loyalty program is the flashy consumer-facing move. A three-tiered system (Green, Gold, Reserve) is clearly designed to gamify spending and squeeze more value from their most dedicated customers. It’s a way to “unlock greater earnings power,” as they put it. But let’s be real—this is also a potential minefield. Starbucks Rewards is a sacred cow for its core base. Tinkering with the points system, benefits, or perceived value is risky. If the heaviest users feel devalued or see it as a pure money grab, it could backfire spectacularly. The program is their crown jewel, with 35.5 million members. You don’t just casually remodel that.
Why The Rating Holds
So why is CNBC’s Investing Club keeping a “2” rating on the stock? It boils down to patience and price. The stock jumped 10% on the earnings news before the investor day. That massive single-day move ate up a lot of the near-term optimism. When a stock rallies hard into a well-telegraphed event, the actual news often becomes a “sell the fact” moment. The club’s analysis suggests the current price already reflects this measured turnaround story. They’re essentially saying the easy money has been made. If the stock pulls back, *then* it might be time for opportunistic buying. But at these levels? You’re betting on flawless execution for years, with little room for error.
The Bottom Line
Look, Starbucks isn’t broken. The worst seems to be over, with transaction growth finally turning positive. Niccol has a clear, operational plan. But the market is a discounting machine—it’s already looking at 2028. The new targets are a roadmap, not a guarantee. And in a consumer environment that’s still shaky, hitting steady low-single-digit growth every quarter for four years is a tall order. Jim Cramer’s take—that impatience here is a mistake—is probably right for long-term holders. But for new money? You might want to wait for a better price. The story is improving, but the stock already told you that.
