There’s a lot going on behind the scenes at coffee shop chain Starbucks (SBUX), and surprisingly little of it has anything to do with coffee. Activist investors are riled and targeting the CEO, and the CEO is staying quiet right now. All of this together sent share prices down nearly 5% in Thursday afternoon’s trading.
The latest news says that Elliott Management, who has been amassing a fairly substantial portion of Starbucks’ voting rights, recently offered Starbucks a settlement that would let current CEO Laxman Narasimhan keep his job. But the board hasn’t yet responded to that offer, making some wonder what the reason is behind the silence.
One potential reason is the ongoing presence of former CEO and current major shareholder Howard Schultz, who hasn’t even been on the board since last year but still carries quite a weight of presence. Schultz isn’t especially happy with Elliott’s settlement offer, and that displeasure is casting a pall over the whole deal. Resolution here, therefore, may be difficult, and internal division won’t help Starbucks reclaim its former glory.
New Fall Menu…but Does Anyone Care?
Now, here is a surprise: the new fall menu has reportedly been leaked, and yes, Pumpkin Spiced Lattes will be back. They are expected to show up on August 22, along with a panoply of new and clearly appropriate fall food items. Pumpkin brews, apple crisp brews, and oat items are all in play.
But there are growing signs that people are passing up Starbucks. As inflation continues to choke the life out of the country, Americans are passing up on McDonald’s (MCD) and Starbucks alike. While there’s still room to enjoy such things, the numbers are on the decline.
Is Starbucks Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on nine Buys and 18 Holds assigned in the past three months, as indicated by the graphic below. After a 25.48% loss in its share price over the past year, the average SBUX price target of $86.26 per share implies 16.41% upside potential.
