After an extended period of lackluster performance in the stock market amidst a boycott over its perceived stance on the conflict in Palestine, rising competition in China, and after contending for years with a nationwide drive to unionize stores, Starbucks (NASDAQ: SBUX) made an abrupt management change on August 13.
The shares of the coffee giant quickly reacted to the news that Laxman Narasimhan, handpicked by Starbucks’ previous head, Howard Schultz, has stepped down and that the CEO of Chipotle (NYSE: CMG), Brian Niccol, will be taking over, and have risen 21.24% in the initial hour of Tuesday trading.
Additionally, the August 13 moves have proven, by press time, strong enough to almost completely erase the losses SBUX has suffered since January 2, and the stock is, with a press time price of 93.39, only 0.30% in the red in the year-to-date (YTD) chart.
SBUX stock YTD price chart. Source: Google
Such a strong move that, within hours, sent the price of Starbucks shares from $75 to above $93 has reignited the debate on when the coffee giant’s stock might again cross above $100.
Analysts predict when Starbucks stock could reach $100
Prior to the leadership change, experts had not been particularly optimistic about Starbucks stock, with only a handful forecasting a rise above $100 within the coming 12 months.
SBUX stock rating. Source: TradingView
Among the analyst firms, the most recent to estimate SBUX can rise above $100 in the forthcoming 52 weeks has been Robert W. Baird. In fact, in the early morning of August 13, Baird upgraded its outlook for Starbucks shares from ‘neutral’ to ‘overweight’ – ‘buy’ – and raised the price target from $81 to $110.
Beyond the Tuesday revision, only a handful of firms that have altered their assessment of SBUX in the last 3 months have a price target above $100 for the company’s stock. In June, Bank of America (NYSE: BAC) reiterated its ‘buy’ rating and increased the 12-month forecast from $108 to $112.
Finally, on July 22, BMO Capital Markets confirmed it still considers SBUX shares a ‘buy’ but downgraded the target from $120 to exactly $100.
Still, it is worth pointing out that the majority of experts have yet to account for the leadership change in their forecasts for Starbucks, and it remains possible – given the morning momentum – that SBUX stock may cross above $100 before the end of trading on August 13.
Should it manage the feat, the more impactful question could be if the level can be maintained after the initial investor enthusiasm is exhausted.
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