While coffee giant Starbucks (SBUX) has not always had the best of relations with the labor unions, things have looked a little more tense than normal in recent days. In fact, based on a new open letter found on the New York City Comptroller’s website, shareholders want Starbucks to get back to the table and work with the unions. Other shareholders seem less concerned, though, as Starbucks shares were up over 1.5% in Friday afternoon’s trading.
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The letter—which was signed by the Comptroller, Brad Lander, along with Trillium Asset Management, Pensions Investment Research Consultants, and the Shareholder Association for Research and Education—called on Starbucks to set up a contract with the Starbucks Workers United union.
The letter also pointed out, with a great deal of “concern,” that Starbucks has been the subject of over 100 unfair labor practices complaints just this year alone so far. Walkouts and protests have also taken place, and even a few strikes. The letter even notes that over three years have passed since Starbucks Workers United set up a union election, and there remains no contract with them, a point the letter sought to address.
Weighing Offers
Meanwhile, Starbucks is also weighing offers for its China business, which it currently estimates to be worth over $10 billion. This includes, reports note, royalties, upfront investment by potential partners, and the value of the stake that Starbucks will keep in the China operations.
Though whether or not it will realize anywhere near that number remains to be seen. After all, Starbucks is facing mounting competition in China, not to mention plenty of other places. Worse, a lot of businesses are reducing their Chinese exposure as trade tensions between the two nations remain elevated as evidenced by the last several months of tariff action.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, six Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 12.91% loss in its share price over the past year, the average SBUX price target of $101.17 per share implies 18.47% upside potential.
