Financial Expert Weighs in on Coffee Giant’s Future Prospects
Renowned financial analyst Jim Cramer recently shared his optimistic outlook on Starbucks, citing the company’s new CEO as a key factor in its potential turnaround. Brian Niccol, former CEO of Chipotle, took the reins at Starbucks last month, replacing Laxman Narasimhan. Despite the company’s recent struggles, including declining sales and a 20% drop in shares during Narasimhan’s tenure, Cramer believes Niccol’s proven track record makes him an ideal leader to steer the company towards recovery.
Cramer analyzed contrasting views from Jefferies and Bernstein, two firms that released opposing assessments of Starbucks’ prospects last week. Jefferies analysts predict a slow and costly turnaround, which could negatively impact earnings in the short term. In contrast, Bernstein analysts are bullish on Niccol’s ability to significantly boost earnings potential, even if the turnaround takes time.
While both firms agree that Starbucks should lower its earnings estimates for 2025, Cramer is willing to look beyond short-term challenges, citing Niccol’s success in improving digital ordering infrastructure and throughput at Chipotle. He recommends buying more Starbucks stock during periods of weakness, confident that Niccol can lead the company towards long-term growth.
The CNBC Investing Club Charitable Trust holds shares of Starbucks, and Cramer’s guide to investing is available for download at no cost. Interested investors can also sign up for the CNBC Investing Club to follow Cramer’s market moves and gain valuable insights into building long-term wealth.
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