Will Starbucks stock price return to $100? 1 Wall Street analyst thinks so.

Starbucks (sub -2.43%) Stocks are looking a little bad this week. Investors reacted to the company’s Tuesday earnings report (which showed a 2% drop in sales and a 14% drop in profit compared to the previous year) with a 16% selloff on Wednesday, and Starbucks stock has yet to rebound. But it could be.

On Wednesday, BTIG analyst Peter Saleh argued that Starbucks stock, currently priced at around $75, will return to $100 within a year.

Will Starbucks stock be bought in 2024?

Saleh acknowledged that Starbucks suffered “the weakest quarter in recent history.” However, the brand remains intact, remains popular with customers, and Starbucks has no competitors of similar size anywhere in the world. These factors mean Starbucks stock remains a buy, according to analyst estimates.

But is he right?

Valued at $75 per share, Starbucks’ costs seem cheap at 20.5 times trailing earnings. is Historically affordable. From 2001 to 2020, the average P/E for Starbucks stock was almost exactly 45, according to S&P Global Market Intelligence data. This means the stock is cheaper than Starbucks today. half It’s a compelling argument to buy Starbucks stock – historically what it costs.

Of course, the short-term outlook does not look particularly bright. Starbucks CEO Laxman Narasimhan warned this week that 2024 profits could be “flat” compared to 2023, with only a low-single-digit increase in the best case. Compared to a 20 P/E ratio, this looks a bit expensive.

That said, Narasimhan has laid out a plan to turn the business around and told investors he expects to see results before the end of 2024. If he achieves a turnaround and Starbucks returns to today’s dismal stock price of $100, the price will seem incredibly cheap.