You have to give Brian Niccol, new CEO of coffee giant Starbucks (SBUX) credit. He is not only running a whole slate of initiatives to turn around Starbucks, but he is also willing to accept credit for his own failures. There were some of those in his first year, as it turns out, but investors were clearly willing to give him the benefit of the doubt. That was clear from the gain of over 2% seen in Thursday afternoon’s trading.
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Niccol’s first year focused on the Back to Starbucks initiative, and ramped up the desperate hunt for a “third place” for customers. Sitting, staying, and savoring were front of mind for Niccol…perhaps, some thought, to the exclusion of just about everything else.
The Back to Starbucks plan has proven a controversial move, with employees, with partners, and even with shareholders. The two rounds of widespread layoffs, the closure of several stores—including the order-only stores that supplies a large portion of the “grab-and-go” market—and even the return-to-office mandate have all faced close scrutiny. In fact, reports noted, Starbucks shares were down over 13% since it announced Niccol as its new CEO.
Coming Soon
But there was more for Starbucks today than looking back. Niccol, speaking on the Opening Bid Unfiltered podcast, revealed that Starbucks was out to be a “…learning organization,” as well as an “…experimental organization.” Thus, new products were being prepared for release.
Starbucks is set to roll out Green Dot Assist, a “virtual assistant platform” that uses artificial intelligence to solve problems faced by employees. Not every problem will be covered here, of course, but issues with equipment or drink making are likely to be covered here. Starbucks is also looking to roll out more “protein-forward breakfast items,” as well as “artisanal pastries.” There are even planned improvements to the Starbucks app, including voice ordering options.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, seven Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 13.03% loss in its share price over the past year, the average SBUX price target of $100.68 per share implies 19.22% upside potential.
