Seattle-headquartered multinational chain of coffeehouses, Starbucks (NASDAQ:SBUX) opened the week with a workers’ strike. Some workers attacked the company with charges of being anti-union and pretending to be pro-queer. The union representing the coffee chain’s baristas had announced on Friday that employees at more than 150 locations would conduct the strike in the upcoming week.
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Prior to the week’s start, Sunday saw an outburst of workers at multiple U.S. Starbucks locations pointing out that café managers pulled down rainbow flags and decorations bracing the LGBTQ+ Pride month.
The union members gave away handbills to passerby’s and spoke about their accusations against Starbucks. Also, numerous customers decided to not enter the cafes, showcasing their angst.
What’s Brewing in the Background?
Starbucks has been in the grind for a year, as it faces the wrath of the Workers United Union, which has blamed the company for threatening union organizers. The union also charges the company with reducing work hours for queer or trans workforce who will thus not qualify for health insurance. The insurance coverage includes gender reassignment surgery and other affirming procedures.
However, Starbucks opposes of taking any such steps and reaffirms that it has been offering health insurance with gender confirmation surgery coverage since 2012.
Contrary Statements
A company spokesperson, as reported by Reuters, said, “We unwaveringly support the LGBTQIA2+ community. It would be inaccurate to report that Starbucks stores are banning any decorations as there has been no change to company policy on this matter.”
In contrast, an employee who joined co-workers on the Sunday strike said, “They’ve used their claim to be a progressive, inclusive company to kind of attract those kinds of people. There’s a performative aspect.”
Is it Good to Buy Starbucks Stock?
Of the 20 top Wall Street Analysts covering Starbucks stock, 11 have a Buy rating while nine assign a Hold, thereby taking the analyst average rating to Moderate Buy. Further, analysts’ 12-month average price target of $118.06 implies a 20.05% upside potential from current levels.
In the last week, Bernstein reaffirmed its Hold rating on the stock with a price target of $102. In its broader consumer industry rating, TD Cowen initiated Starbucks with a Buy rating early last week with a price target of $117 marking an 18.9% upside potential from current levels.
Piper Sandler Analyst Brian Mullan assigned a Neutral rating and $107 price target. The analyst believes that the upside levels of 8.8% is shadowed by economic uncertainty, thereby indicating risk in 2H23 and into the first half of calendar 2024.
Contrarily to the average analysts rating of Moderate Buy, Technical Analysis of the SBUX stock indicates a Sell, based on 20-Day and 50-Day exponential moving averages.
