Starbucks (SBUX) shares could percolate later in 2025 as it brews up better financial performances under new CEO Brian Niccol after a challenging 2024, says long-time Starbucks watcher Peter Saleh. 

In Saleh's eyes, a focus by Niccol — who took over as CEO in Sept. 2024 — on faster service times, simpler pricing and better store operations are the ingredients to reestablish Starbucks shares as a top performer. 

"We believe that progress against these initiatives in 2025 will set the stage for outsized same-store sales and earnings growth in 2026 and beyond, catalyzing shares as we progress through the year and that recovery trajectory emerges," Saleh, the BTIG restaurant analyst, said in note on Thursday. 

Saleh slapped Starbucks as one of his top first half of 2025 picks, assigning a $115 price target. The target assumes about 30% upside from current levels. 

The average sell-side price target on Starbucks is currently $103, Yahoo Finance data shows. 

"We expect 2025 will be a transition and investment year for Starbucks, as management has suspended guidance, slowed development, and reset operations to engineer a sustainable turnaround," Saleh wrote, hinting Starbucks rebound won't be smooth sailing this year. 

That notion is underscored by Starbucks' stretch of less-than-caffeinated financial results. 

Starbucks' most recent quarter showed a 7% drop in global comparable-store sales as consumers shunned the chain's ever-pricier coffees and long wait times. North America comparable store sales tanked 6%.

International sales plunged 9%, and Chinese comparable sales cratered 14%. Non-GAAP operating profit margins fell 380 basis points from the prior year to 14.4%. 

"I would love to see the foot traffic start to turn around to drive that same-store sales growth... That's going to be a key piece of the puzzle for us going forward," Niccol told Yahoo Finance about the US business in a Nov. 4 interview (video above).

Watch more: why Sweetgreen is using robots to serve food 

Starbucks shares ended 2024 down 5% compared to a 23% advance for the S&P 500. McDonald's (MCD) shares finished the year up slightly.

CFOTO via Getty Images

Starbucks shares — which for years have traded at relative premiums to competitors — trade on a trailing 12-month price-to-sales ratio of 2.87 times. That is below fellow coffee purveyors McDonald's (MCD), at 8.1 times, and Dutch Bros (BROS) at 4.1 times, according to Yahoo Finance's stock comparison tool.

"They obviously got an amazing pick," Brinker International (EAT) CEO Kevin Hochman told Yahoo Finance about his former Yum! Brands colleague. "He's going to do his normal Brian Niccol magic. And I can't wait to see what they're going to be about."

Saleh also removed Domino's Pizza (DPZ) from his top picks list out of the restaurant space.

Three times each week, I drive insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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