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Starbucks Sustains Sales Momentum in April on Better Execution, Morgan Stanley Says

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Starbucks (SBUX) sustained its sales momentum in April, driven by ongoing innovation and better execution despite a dynamic macro landscape, Morgan Stanley said in a Wednesday research report.

The company's solid Q2 earnings beat was driven by transaction strength with margin beat partly linked to accounting in the China deal, but North America margins continue to face pressure, analysts wrote.

The brokerage raised its Q3 and Q4 comp forecast to 5.7% and 4.7%, respectively. For Q3, it expects EPS of $0.63 and $0.67 for Q4. For the full-year 2026, Morgan Stanley now expects EPS of $2.37 from $2.27 earlier.

Operations, staffing, innovation, marketing, and improving the asset base appear to be driving compounding benefits alongside the impacts from cost actions, according to the note.

The brokerage said it reiterated its overweight rating on the stock and boosted its price target to $110 per share from $105 earlier.

Price: $104.81, Change: $+7.53, Percent Change: +7.74%

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