Jefferies analyst warned in a research report that even with the new CEO, it is too early to be excited about Starbucks's prospects for a turnaround, and the struggling coffee chain operator has been rare to give a "sell" rating.
According to CBN Financial App, Jefferies analyst warned in a research report that even with the new CEO, it is too early to be excited about the prospect of Starbucks (SBUX.US) turning around, and the struggling coffee chain operator has been rare to give a rare "sell" rating.
Since Chipotle Mexican Grill's (CMG.US) former CEO Brian Niccol suddenly took over as Starbucks CEO in August, Starbucks stock price has soared by 24% as of Monday's close. However, in the view of Jefferies' Andy Barish, this rebound has "gone too far" as the path to improving operations is not smooth.
Barish stated in a research report: "Although the new CEO has indicated that necessary global strategy changes are on the table, we believe that with operational, cultural, values, and technology issues needing time to address, execution will face challenges." He lowered Starbucks' target price to $76, the lowest target price of all Wall Street analysts covering the stock, implying a 20% drop from Monday's closing price of $95.48 in the next 12 months.
Since the leadership change, Wall Street analysts have been raising Starbucks ratings, but Barish has downgraded Starbucks to a "sell" rating. According to compiled data, this is one of only two sell ratings for the stock so far and also the first time the analyst has given a sell rating since covering the American company in 2011.
Due to the trend of consumer downgrading this year, Starbucks stock has been under pressure. In pre-market trading on Tuesday, the stock fell by 0.51%.