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Key Takeaways
- Starbucks withdrew its outlook for 2025, sending shares lower before paring back most of their losses Wednesday.
- Bank of America analysts said a reset was largely expected and anticipate “easy wins.”
- New CEO Brian Niccol could be “well suited for SBUX turnaround,” the analysts said, given similar challenges Niccol faced at Chipotle.
Starbucks (SBUX) on Tuesday withdrew its outlook for 2025, sending shares sharply lower before paring back most losses in intraday trading Wednesday. Bank of America analysts said a reset was largely expected and anticipate “easy wins.”
The bank suggested the withdrawal of guidance, which came after CEO Brian Niccol took the reins last month, was effectively priced in. The coffee giant previously guided for 15% to 20% growth in earnings per share in fiscal 2025, but the Street consensus is for a decline of 0.3%, analysts said.
Starbucks said the decision “will allow ample opportunity to complete an assessment of the business and solidify key strategies.”
Shares of Starbucks initially tumbled on the news, but have since recovered and were little changed in Wednesday afternoon trading.
BofA Calls New CEO Brian Niccol ‘Well Suited’ for a Turnaround
Starbucks’ “brand remains fundamentally strong” the analysts said, adding “we see easy wins, think EPS growth still possible.”
New CEO Brian Niccol could also be “well suited for SBUX turnaround,” the analysts said, given similar challenges Niccol faced at Chipotle Mexican Grill (CMG). They cited comparable “reputational issues,” but noted they are “not the widely circulated bear cases that surrounded both.”