New CEO Brian Niccol’s Tasks Include Fixing Operations, Culture, and Tech Issues
- Starbucks Corp. downgraded by Jefferies due to challenges facing new CEO Brian Niccol
- Jefferies cites issues like operations, culture, value perception and technology as hurdles for Starbucks
- Analyst firm expects U.S. same-store sales to decline 4% in fiscal fourth quarter
- Weaker-than-expected fiscal 2025 guidance could make it a ‘throwaway’ year for Starbucks
- Jefferies lowers global unit growth target from 7% to 5% and questions revenue and EPS growth targets
Jefferies downgraded Starbucks Corp. due to the numerous challenges facing new CEO Brian Niccol, including operations, culture, value perception, and technology issues. The analyst firm expects U.S. same-store sales to decline by 4% in the fiscal fourth quarter, compared to a consensus estimate of a 2.8% decline. Jefferies also lowered its price target from $80 to $76. The company’s global unit growth target has been reduced from 7% to 5%, and the long-term revenue and EPS growth targets are now considered less achievable for Starbucks.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Starbucks’ downgrade by Jefferies and the challenges faced by new CEO Brian Niccol. It also discusses the company’s financial targets and growth prospects, citing relevant sources and expert opinions. The article is mostly objective and informative, with some speculation regarding future performance.
Noise Level: 4
Noise Justification: The article provides relevant information about Starbucks’ downgrade by Jefferies and discusses the challenges faced by new CEO Brian Niccol. It also mentions the company’s financial targets and growth prospects. However, it lacks in-depth analysis or insights into long-term trends or possibilities, and does not explore consequences of decisions on those who bear the risks.
Public Companies: Starbucks Corp. (SBUX), Chipotle Mexican Grill Inc. (), Yum! Brands Inc. ()
Key People: Brian Niccol (CEO of Starbucks), Andy Barish (Analyst at Jefferies), Sara Senatore (Analyst at Bank of America Securities)
Financial Relevance: Yes
Financial Markets Impacted: Starbucks shares SBUX were down 0.7% at 9:31 a.m. Eastern time Tuesday, and Jefferies analyst Andy Barish downgraded the company to underperform with a lower price target.
Financial Rating Justification: The article discusses Starbucks Corp.’s downgrade by Jefferies and its impact on the company’s stock performance, as well as potential challenges for new CEO Brian Niccol in addressing operational, cultural, and technological issues. This has financial relevance as it pertains to the company’s financial performance and stock market movements.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text and it doesn’t discuss any major incident or crisis.
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Medium
Affected Instruments: Stocks
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