• In recent days, Starbucks confirmed that senior vice president Val Bauduin, a former Marriott accounting leader and interim Starbucks CFO, has become the company’s principal accounting officer while continuing to report to CFO Cathy Smith and without changes to his compensation.
• At the same time, media reports indicate Starbucks is reviewing options for its Japan business, including a partial stake sale or IPO that could value the unit at up to ¥500 billion (about US$3.10 billion), highlighting a broader shift toward lighter ownership models after selling a majority stake in its China operations.
• Next, we’ll examine how Starbucks’ consideration of a stake sale or IPO for its Japan operations could influence the existing investment narrative.

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Starbucks Investment Narrative Recap

To own Starbucks, you need to believe its global brand, store base, and “Back to Starbucks” turnaround can support earnings progress despite higher costs and mixed comps. The potential Japan stake sale or IPO, if it happens, could affect how capital is allocated but does not fundamentally change the near term focus on margin recovery as the key catalyst or labor and cost inflation as the biggest risk.

Among the recent developments, Starbucks’ reported review of options for its Japan business stands out. With Japan being a key international market and heavily company operated, any move toward a lighter ownership model would sit squarely alongside its recent shift in China, and could become relevant for how investors think about future cash generation, balance sheet flexibility, and management’s ability to reinvest behind the turnaround catalysts.

But while the turnaround story is compelling, investors should also be aware that...

Starbucks’ narrative projects $45.5 billion revenue and $4.6 billion earnings by 2028. This requires 7.5% yearly revenue growth and about a $2.0 billion earnings increase from $2.6 billion today.

Uncover how Starbucks' forecasts yield a $99.94 fair value, in line with its current price.

Exploring Other Perspectives

Some of the lowest ranked analysts paint a far tougher picture, even before this Japan news, assuming only about 1.4% annual revenue growth and US$3.7 billion of earnings by 2029, so it is worth comparing that cautious view with your own expectations.

Explore 11 other fair value estimates on Starbucks - why the stock might be worth 29% less than the current price!

Decide For Yourself

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Starbucks research is our analysis highlighting 1 key reward and 5 important warning signs that could impact your investment decision.
• Our free Starbucks research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Starbucks' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.