The holiday season may be over, but the labor drama at Starbucks (SBUX) is far from resolved. The five-day barista strike by Workers United union members, which ended on December 24, was just the beginning. The union is demanding better pay and benefits, and they’re not backing down until they get an offer from the coffee giant that satisfies them.
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The union’s proposal includes a whopping 64% minimum wage hike for hourly employees and an overall 77% raise over the next three years. Unsurprisingly, Starbucks called this proposal “unsustainable,” which now sets the stage for a lengthy and potentially contentious negotiation process. The union, however, remains undeterred as it looks to continue fighting for its demands.
Despite the strike, Starbucks claims that business was largely unaffected, with only around 170 stores closed out of over 10,000. The company’s stock even saw a slight bump in Thursday’s trading as it closed over 2% higher.
Strikes Are a Growing Theme
Strikes seem to be a growing theme among major companies, as Starbucks is not the only one facing this issue right now. Indeed, Amazon has been dealing with its own labor issues, as seven facilities across the U.S. went on strike last week as the Teamsters union aimed to make a statement during the peak holiday season. But similar to Starbucks, Amazon said that the strikes did not disrupt operations since most of the participants were outside organizers.
Is Starbucks a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 1% decline in its share price over the past year, the average SBUX price target of $103.52 per share implies 12.7% upside potential.
