Proxy Fight and Labor Troubles Hit Starbucks (NASDAQ:SBUX)
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Proxy Fight and Labor Troubles Hit Starbucks (NASDAQ:SBUX)

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Starbucks faces a proxy fight over labor troubles, and wait until you see their new latte in China!

There was some unwanted news today for Starbucks (NASDAQ:SBUX), but its investors are taking the potential troubles in stride. The coffee shop chain was up fractionally in Tuesday afternoon’s trading despite a proxy fight for its upcoming annual meeting and some new labor troubles in the making.

This time around, Starbucks is fending off accusations from the Strategic Organizing Center (SOC), which claims that Starbucks’ labor relations are little more than a “…flawed human capital management strategy.” To address that, the SOC is pulling together proxy votes to bring in three new board members to take over some potentially open slots. The SOC further alleges that Starbucks’ handling of the whole unionization issue has delivered a blow to shareholder value overall.

Starbucks disputes that claim, noting that its board offers “…world-class business leaders that bring the qualifications and expertise directly relevant to drive our current operations and future success.” This comes at a time when 21 Starbucks locations are targets of a one-day unionization blitz that may make this exact problem even worse for Starbucks.

A Puzzling New Option

That’s going to make for some very serious issues come March, when the annual meeting kicks in. But in the meantime, Starbucks has a new issue on its plate: coffee flavorings. It’s bringing a new flavor to China that might catch on and may even go wider one day. It’s a “braised pork latte,” which sells under the name “Abundant Year Savory Latte.” It combines some pork breast meat with Dongpo Braised Pork Flavor Sauce and steamed milk.

What Is the Future of Starbucks Stock?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 10 Buys and 16 Holds assigned in the past three months, as indicated by the graphic below. After an 8.93% loss in its share price over the past year, the average SBUX price target of $107.88 per share implies 15.7% upside potential.



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