Stifel analyst Chris O’Cull upgraded Starbucks to Buy from Hold with a price target of $110, up from $80, following the appointment of Brian Niccol as Chairman and CEO. Starbucks remains a “healthy and relevant brand” across most generational cohorts, but it lacks a coherent growth strategy and struggles with execution, the analyst tells investors in a research note. The firm assumes Niccol’s top priority will be reversing the negative U.S. transaction trend. Many of the company’s current objectives to accomplish that feat, including improving throughput, product innovation, and digital marketing, may remain the same, but prioritization and execution should be much better under the new leadership, contends Stifel. It expects the shares to remain supported by positive sentiment over the next few quarters, even if near-term results fall short of Street estimates.
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