Give Starbucks (NASDAQ:SBUX) investors credit. While the idea of a one-day strike hitting on Red Cup Day seems like a disaster in the making, Starbucks investors are taking it all in stride. In fact, Starbucks is actually up somewhat in Thursday afternoon’s trading, despite not only a strike but a growing chorus of labor complaints as well.
The initial and arguably most immediate significant issue for Starbucks arose when employees at over 200 different locations walked off the job during the Red Cup Day celebrations. Workers United called this the largest such strike yet, and they’ve been at this for the last two years.
Red Cup Day is one of Starbucks’ biggest days, as it typically hands out a series of red cups—hence the name—that customers can reuse as they please. Striking workers were not only picketing but also, reports note, going to non-union shops in a likely bid to pull more support on board.
And Then, The Government Got Involved
That’s bad enough news for Starbucks. While 200 locations out of Starbucks’ 16,255 in the United States (as of October 3, 2023) isn’t exactly much more than a bit of a black eye, it’s what else happened that may prove even worse still. Starbucks staffers turned to New York City itself, filing several complaints with the coffeehouse chain about violations of the Fair Workweek Act.
Under the terms of said Act, employers not only must provide regular schedules but also 14 days’ notice in advance of said hours and extra pay for any changes. That’s among several other points, but so far, Starbucks has been accused of violating said Act close to 90 times now. That’s potentially another major problem. I’m not a lawyer, but breaking the law that many times in sequence could open up civil suits or worse.
Is Starbucks a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on seven Buys and 12 Holds assigned in the past three months, as indicated by the graphic below. After a 1.2% rally in its share price over the past year, the average SBUX price target of $111.33 per share implies 3.75% upside potential.
