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Starbucks Corporation (NASDAQ:SBUX) could get a jolt on Monday after Barron’s profiled the coffee chain favorably over the weekend. The publication said shares of Starbucks (SBUX) look oversold after the early 2024 slump.
Starbucks (SBUX) was noted to still be growing at a rapid pace and adapting through a strategy of smaller stores, greater efficiency, and diverse products to attract new customers. If those measures are executed successfully by Starbucks (SBUX) management, the stock is seen being lined up for a big bounce.
Despite the focus of investors on disappointing comparable sales growth in the U.S. and China, the overall picture is still impressive. Starbucks (SBUX) dominates in the U.S. with more than 16,000 outlets in the U.S., and a 40% market share. “It’s tough to keep growing the same-store sales, but Starbucks remains a formidable brand that’s operating at an unprecedented scale in the global coffee market,” noted Jeffrey Young, CEO of Allegra Group, the parent company of World Coffee Portal.
Crucially, Starbucks (SBUX) is seen working through some of the operational issues that have held back store performance. Former Starbucks (SBUX) CEO Howard Schultz addressed that issue last month. “I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” he wrote in a LinkedIn post. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant,” he added. Schultz said Starbucks’ (SBUX) mobile ordering and payment platform needs to be reinvented, and its go-to-market strategy overhauled to reinforce its premium position.
Wall Street analysts and Seeking Alpha analysts have a consensus Buy rating on Starbucks (SBUX).
