1 Obvious Way This Consumer-Facing Stock Can Beat the S&P 500 Over the Next 3 Years

By Neil Patel – Apr 16, 2026 at 6:35AM ESTKey PointsThanks to turnaround progress, this company's leadership team expects adjusted earnings per share to rise 73% (at the midpoint) between fiscal 2025 and fiscal 2028.The business not only needs to execute flawlessly, but external forces must work to its benefit.It seems more plausible than not that this coffee stock’s steep valuation will contract over the coming three years.It wasn't long ago that Starbucks was energizing investors' portfolios. During the three-year stretch leading up to their all-time high in July 2021, shares of the coffeehouse chain soared 145%. This gain handily outperformed the S&P 500 index. But operational challenges have resulted in heightened volatility since then. This coffee stock trades 22% below its record (as of April 14). But there's one obvious way that it can beat the benchmark over the coming three years. Image source: Getty Images. Management expects profits to rise meaningfully At its 2026 Investor Day meeting in late January, Starbucks' leadership team gave investors one reason to be extremely optimistic about the future. Management provided an explicit forecast, expecting adjusted earnings per share (EPS) to total between $3.35 and $4.00 in fiscal 2028. Compared to fiscal 2025's $2.13, this implies fantastic growth of 73% (at the midpoint). Investors should want nothing more than this to become reality. That's because in the past three years, between fiscal 2022 and fiscal 2025, adjusted EPS declined by 28%. Starbucks dealt with falling same-store sales, as consumers didn't appreciate what became a subpar experience characterized by long wait times and a complex menu at its locations. The competitive intensity of the industry also doesn't make things easy. Starbucks is making progress with its turnaround efforts. Comparable transactions globally increased 3% in the fiscal 2026 first quarter (ended Dec. 28, 2025). The business revamped its loyalty program, is focused on menu innovation, and is investing in its labor and technology to streamline store operations. Growth is also a priority over the long run. Executives see potential for more locations in the U.S. and internationally. ExpandNASDAQ: SBUXStarbucksToday's Change(-0.10%) $-0.10Current Price$98.37Key Data PointsMarket Cap$112BDay's Range$97.81 - $99.1652wk Range$75.50 - $104.82Volume45Avg Vol9MGross Margin15.73%Dividend Yield2.50% Investors shouldn't overlook this headwind All else equal, if Starbucks can increase adjusted EPS 73% between fiscal 2025 and fiscal 2028, then its stock should have no problem outperforming the S&P 500, as this translates to a 20% annualized gain. Profit growth is a powerful tailwind for shareholder returns. This outcome is not guaranteed, though, as there is always a lot of uncertainty with any company's ongoing turnaround efforts. Not only does Starbucks need to execute flawlessly, but external forces like industry trends, consumer behavior, and macro forces must work to its benefit as well. Even assuming everything goes right, however, and there is still one headwind investors shouldn't overlook: valuation. Starbucks isn't cheap. The stock trades at 46 times its fiscal 2025 adjusted EPS right now. This multiple would need to stay constant three years from now for the shares to generate a return that mimics the possible 73% rise of adjusted EPS mentioned earlier. I view this as an unlikely scenario. Despite management's upbeat financial forecast, investors might be better off avoiding this stock that provides no margin of safety.Read NextApr 7, 2026 •By Matt DiLalloBest Restaurant ETFs for 2026 and How to InvestMar 24, 2026 •By Parkev Tatevosian, CFAIs Starbucks Stock an Undervalued Dividend Stock to Buy?Mar 19, 2026 •By Rachel WarrenHow to Buy Starbucks Stock (SBUX) in 2026Mar 18, 2026 •By Daniel SparksDown Almost 9% in 1 Week, Is This Your Chance to Buy Starbucks Stock?Mar 18, 2026 •By Rachel Warren9 Best Dividend Stocks to Buy and Hold for March 2026Mar 17, 2026 •By Neil PatelCould Buying Starbucks Stock Today Set You Up for Life?About the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedStarbucksNASDAQ: SBUX$98.34(-0.13%)-$0.13S&P 500 IndexSNPINDEX: ^GSPC$7,022.95(+0.80%)+$55.57*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.