The investment firm said its model predicts weak earnings from 2026 to 2028.

TD Cowen on Thursday lowered its rating on Starbucks (SBUX) due to what the analyst sees as weak projections for the coffee chain's business.

According to The Fly, the firm lowered its rating to 'Hold' from 'Buy' but kept the price target unchanged at $90.

TD Cowen said that its model now predicts Starbucks' earnings for 2026 to 2028 will be below consensus estimates as the company invests behind its turnaround efforts.

Major analysts are not considering the labor investment Starbucks would likely have to make in their models, TD Cowen said.

It noted additional risks, including weak sales growth resulting from deteriorating value perceptions, historical underperformance during recessions, and increased competition.

Earlier this month, Goldman Sachs cut its rating on the company to 'Neutral' from 'Buy.'

On Stocktwits, the retail sentiment for Starbucks was 'bearish,' unchanged over the last month.

SBUX sentiment and message volume as of May 29 | Source: Stocktwits

Last month, Starbucks Corp reported second-quarter results that missed Wall Street expectations, fueling doubts about how soon its new turnaround strategy will deliver results.

Last October, the coffee chain appointed Brian Niccol from Chipotle as its CEO. Since then, Niccol has listed several strategies to boost customer experience and sales.

The company also faces a strike from its baristas in the U.S., and is reportedly exploring options for its China business.

Starbucks shares are down 7.9% this year.

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