We're raising our price target on Starbucks after a robust beat-and-raise quarter

Shares of Starbucks rallied on Tuesday after the coffee giant topped Wall Street estimates and lifted its full-year outlook — a major signal that CEO Brian Niccol's turnaround plan is gaining momentum. Revenue in the three months ended March 29 totaled $9.53 billion, up 8.8% year over year and beating the consensus estimate of $9.16 billion, according to LSEG data. Adjusted earnings per share (EPS) came in at 50 cents, beating an expectation of 43 cents, LSEG data showed. On an annual basis, adjusted EPS grew 22%. Comparable store sales, a key restaurant industry metric, surged 6.2%, well ahead of the FactSet consensus of 4% growth. The stock jumped about 4% to roughly $102 per share in after-hours trading. SBUX 1Y mountain Starbucks 1-year return Bottom line The "turn" in the turnaround is here, according to Niccol, and it's hard to argue with that based on the second-quarter results. Niccol joined the company in September 2024, and while it took some time for him to find the right strategy for the stores and menus, we're starting to see him hit his stride. There are so many "first quarter since" superlatives in these numbers. This was Starbucks' first earnings beat in five quarters and only the second beat since the December 2023 result. It was the first quarter of growth on both the top and bottom line in more than two years. It was the first quarter of consolidated margin expansion since the first quarter of fiscal 2024. …