Shares of Starbucks are up approximately 2% following a rating upgrade from William Blair. The firm is optimistic, predicting the coffee chain will achieve its first U.S. same-store sales increase in two years. This positive outlook signals a potential turnaround after a period of challenges, though margin recovery is anticipated to take several years, according to the broker's analysis.

William Blair anticipates a 2% consolidated comparable sales gain in the December quarter. This includes a 2% rise in North America, marking a significant milestone. The firm expects the comp improvement to set Starbucks up for positive full-year comps in fiscal 2026. However, increased labor costs represent a challenge to profitability, which will be discussed at the investor day at the end of the month.

Internationally, William Blair anticipates a 2% comp gain, including 1% growth in China. The firm's analysts noted that margins remain a key concern for investors. Americas operating margin fell to 13.4% in fiscal 2025. Starbucks plans to add about $500 million of incremental labor costs in fiscal 2026, impacting the bottom line.

Looking ahead, William Blair expects a multiyear recovery plan to be outlined at the investor day on January 29. They foresee a path for consolidated operating margins to approach fiscal 2023 levels by 2030, assuming consistent global unit growth and low-single-digit comps. This could lead to a 15% to 20% EPS compound growth rate over the next five years, despite potential short-term headwinds.