Opco not ready to ‘jump on the bandwagon’ and pitch Starbucks shares

Oppenheimer says shares of Starbucks (SBUX) are up 22% since announcing Brian Niccol as its new CEO. The “prompt re-rating” is justified even though the near-term share performance is likely to be dislocated from fundamentals, the analyst tells investors in a research note. While Niccol brings an “all-star track record,” there are “stark contrasts” between the challenges and opportunities he inherited at Chipotle (CMG) versus Starbucks, contends the firm. Opco is now “more positively biased” on Starbucks, but isn’t ready to “jump on the bandwagon” and pitch the stock at current levels on Niccol’s history alone, particularly with risks to Street’s 2025 estimates “still lurking.” As such, it keeps a Perform rating on the shares.