Cramer Doubts SBUX Drop
Jim Cramer Surprised by Starbucks Stock Dip Amid Easing Coffee Prices; Stifel Upgrades Target
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Jim Cramer says he is "surprised" that Starbucks stock has dropped even as global coffee prices hit an 18-month low. Insider Monkey reported that the CNBC "Mad Money" host called SBUX a "club name" — a holding in his Charitable Trust — and tweeted that the collapse in coffee costs combined with a "real good game plan" should be lifting the stock, not sinking it.
Starbucks shares are trading near $102–$103, well below analyst price targets. Arabica coffee futures fell to $2.31 per pound on June 9 — down roughly 20% year-over-year — after Brazil forecast a record crop of 71.9 million bags for the 2026/27 season. Cheaper coffee means lower costs for Starbucks. Yet the stock has not responded the way Cramer expected.
Cramer Sees a Buying Opportunity in the Dip
Cramer has been consistently bullish on Starbucks. On April 30, 2026, he called SBUX "a multi-year rocket ship." His surprise now comes from a clear disconnect. Coffee is the company's biggest input cost. When coffee gets cheaper, profits should rise. The stock should follow. That has not happened, and Cramer thinks the market is wrong.
Supporting his view, Stifel analyst Chris O'Cull raised his price target on SBUX to $117 from $115 on May 7. He kept a "Buy" rating. Yahoo Finance noted that O'Cull believes the market is underestimating the margin benefits from Starbucks' new China licensing deal with Boyu Capital, a $13 billion transaction that shifted nearly 8,000 stores to a high-margin model.
"Back to Starbucks" Turnaround Shows Real Numbers
CEO Brian Niccol took over on September 9, 2024, and launched the "Back to Starbucks" strategy. It reversed the previous focus on speed and mobile orders. Instead, Niccol brought back comfortable seating, ceramic mugs, and a coffeehouse feel. On April 28, 2026, Starbucks reported Q2 fiscal 2026 results that beat Wall Street estimates.
Revenue hit $9.53 billion, up 8.8% from a year earlier. Non-GAAP earnings per share came in at $0.50, beating the $0.44 analyst estimate by $0.08. U.S. comparable sales jumped 7.1%. Niccol declared at the earnings call, "This is the Starbucks our customers deserve." CFO Cathy Smith also raised full-year EPS guidance to $2.25–$2.45 and outlined a $2 billion cost-savings plan through 2028.
Bears Point to Debt, Valuation, and Labor Tensions
Not everyone shares Cramer's optimism. Wolfe Research holds a "Peer Perform" rating, warning that the stock's valuation is rich — it trades at a trailing price-to-earnings ratio of 74. Starbucks also carries negative $8.46 billion in shareholders' equity, the result of years of debt-financed stock buybacks. Simply Wall St scores the stock 0 out of 6 on common valuation checks.
Labor unrest adds another layer of risk. Starbucks Workers United led strikes at over 230 stores between November 2025 and January 2026. The union has filed over 600 labor law charges and accuses Starbucks of "regressive bargaining." Analysts at Wolfe Research say headline risk from ongoing labor disputes keeps a lid on the stock, even when the underlying fundamentals improve. TD Cowen, however, remains bullish with a $120 price target.
Coffee Prices Ease, But Cost Savings Have Not Yet Hit the Bottom Line
Global Arabica coffee futures dropped sharply in early June 2026. The USDA projects Brazil's 2026/27 harvest at a record 71.9 million bags. Rabobank estimates a global coffee surplus of 9.5 million bags. These numbers point to continued low prices — a direct tailwind for Starbucks' margins in the months ahead.
The catch, according to Insider Monkey, is that Starbucks is currently using those savings to fund higher labor costs. Niccol has committed to ensuring 85% of partners get their preferred hours by end of 2026. That investment in staff eats into the margin gains from cheaper coffee — at least for now. Cramer believes the savings will eventually show up. The market, so far, is not convinced.
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