Starbucks (SBUX) shares warrant some caution as they seem to be disconnected from fundamentals, Oppenheimer said in a Thursday note ahead of its fiscal Q3 results on July 29.

Oppenheimer analysts said the shares have risen 3% year-to-date while 2026 EPS estimates going down about 25%.

"We still identify add'l downside earnings risk, which keeps us treading cautiously," the analysts said.

They also pointed to its plans to accelerate expenses based on their conviction that its demand issues are primarily operational -- a dynamic that could continue pressuring earnings forecasts.

The analysts said Street estimates indicate a "healthy sales recovery" into 2026, which creates a "difficult path to uncover the earnings upside required to turn bullish at the current 33x forward P/E."

"We reduce estimates through 2026E below consensus and struggle to defend an upside case," they said. For Q3, they expect EPS of $0.64, below the consensus estimate of $0.65.

Oppenheimer has a perform rating on Starbucks.

Price: 92.66, Change: -1.04, Percent Change: -1.11