Starbucks (SBUX) Stock: Coffee Giant Plans Over 2,000 New Stores as TD Cowen Lifts Price Target

TLDR

• Starbucks plans to open more than 2,000 new stores globally in Fiscal 2028, triple this year’s expected additions
• The company will add 400 company-operated stores in the U.S. by 2028, with potential for 5,000 more in following years
• New store formats include smaller “Ristretto” designs that cut building costs by roughly 20%
• International expansion targets 40,000 stores outside the U.S., including 15,000 to 20,000 new locations in China
• TD Cowen raised its price target to $89 from $84 with a Hold rating, citing better visibility on 2028 earnings guidance

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Starbucks is preparing for its biggest expansion wave in years. The coffee chain revealed plans to open more than 2,000 stores worldwide in Fiscal 2028.

Starbucks Corporation, SBUX

That’s triple the number it expects to add this year. CFO Cathy Smith shared the details at a recent investor event after the company reported mixed first-quarter results.

The announcement signals a shift. Starbucks closed several underperforming locations last year. Now it’s betting big on growth again.

In the United States, the company will open 400 new company-operated stores by 2028. But that’s just the start. Executives see room for as many as 5,000 more U.S. locations down the road.

Most of the new stores will target the central, southern, and northeastern regions. These are areas where competitors like 7 Brew and Dutch Bros have been gaining ground with their drive-through models.

The expansion comes as Starbucks faces pressure to keep up with faster-moving rivals. Drive-through coffee chains have been pulling customers who want quick service without leaving their cars.

New Store Designs Cut Costs

Starbucks is rethinking how its stores look and operate. Future locations will handle drive-through orders, mobile pickups, delivery, and traditional counter service all in one place.

In dense urban areas where drive-throughs don’t work, the company will use smaller cafe-style formats. One new concept is the “Ristretto” store, named after a type of espresso shot.

These locations are smaller than typical Starbucks shops. But they still offer seating and a full coffee bar. The updated designs are expected to reduce construction costs by about 20%.

Lower building costs matter. With thousands of new stores planned, those savings add up fast.

China Expansion Takes Center Stage

Starbucks currently runs nearly 23,000 stores outside the United States. Company executives believe that number could reach around 40,000 over time.

China represents the biggest opportunity. The company already operates 8,000 stores there. It plans to add between 15,000 and 20,000 more Chinese locations.

Starbucks recently agreed to sell a majority stake in its China business to Boyu Capital. The deal will shift most international stores to a licensed model, where local partners operate the locations.

Once the transaction closes, about 90% of Starbucks’ overseas stores will be run by licensees. That’s up from 55% currently.

The licensing model lets Starbucks expand faster with less capital. Local partners handle day-to-day operations and take on more of the financial risk.

TD Cowen analyst Andrew Charles lifted his price target on Starbucks stock to $89 from $84. He maintained a Hold rating on the shares.

Charles noted that with better visibility on 2028 earnings guidance, the stock looks like a momentum story. He pointed out that shares are trading at a peak 32-times forward-earnings multiple.

The analyst expects multiple expansion if first-quarter North America same-store sales growth accelerates beyond the 4% reported. Wall Street currently has a Moderate Buy consensus rating on Starbucks based on 13 Buy, seven Hold, and two Sell recommendations. The average price target of $98.22 implies upside potential of nearly 2%.

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