From Financial Modeling Prep: 2024-09-26 08:34:00

Starbucks (NASDAQ:SBUX) shares surged over 2% pre-market as Bernstein upgraded the company to Outperform, citing optimism about new CEO Brian Niccol’s leadership and potential operational improvements. The firm raised its price target to $115 from $92, confident in Starbucks’ ability to drive future earnings growth despite current challenges.

Niccol’s appointment as CEO has already boosted investor confidence, with shares rising 27% since the announcement. Bernstein praised his leadership experience at Taco Bell and Chipotle, positioning him as the right person to guide Starbucks through its transition.

While a full turnaround will take time, Bernstein is optimistic that Starbucks could benefit from Niccol’s strategic changes sooner rather than later. The firm anticipates a shift towards balanced growth, prioritizing operational stability over aggressive expansion.

Bernstein predicts Starbucks will return to pre-Covid operating margin levels of around 18.5%, driven by improvements in store operations, customer traffic, and menu innovations. Despite planned investments, operating margins are expected to reach new highs by 2028 as efficiencies are realized.



Read more at Financial Modeling Prep:: Bernstein Upgrades Starbucks to Outperform, Shares…