Wall Street is shrugging off Howard Schultz's departure from Starbucks (SBUX)

Howard Schultz

  • Starbucks Chairman Howard Schultz announced he is stepping down.
  • Starbucks investors and analysts seem to be saying two opposing things.
  • Shares are down more than 2% on the news.
  • But analysts are largely bullish. 
  • Watch Starbucks trade in real time here. 

Investors and analysts are taking divergent paths on Starbucks after chairman Howard Schultz announced he is stepping down from his post. Shares are down more than 2% on the news.

But analysts maintain their view that the coffee giant will continue with business as usual. Wall Street’s consensus price target is an unchanged $63.88, according to Bloomberg data. That’s roughly 4% above its current level.  

UBS analyst Dennis Geiger said in a note out to clients Monday that “Starbucks’ long term outlook remains attractive.” He has a price target of $66 a share, about 18% above current levels.

He added, “We expect shares will come under modest initial pressure given the departure of such a unique talent and visionary, but quickly return to trading on expectations for near-term fundamentals.”

Geiger also emphasized the importance of Schultz’s belief in social responsibility, which he says will in turn drive growth in Starbucks’ two key markets; the US and China.

Meanwhile, Barclays analyst Jeffrey Bernstein kept his price target of $65 a share, some 16% above the stock’s current level. Bernstein stressed he is confident in Starbucks management and its style of conducting business.

“While we cannot overstate Schultz’s legacy at Starbucks, we believe he leaves intact an executive team and board that are fully committed to his ideals of sustainable growth combined with a social conscience, under the leadership of CEO Kevin Johnson,” Bernstein wrote in a note sent out to clients on Monday.

Johnson took over as CEO on April 3, 2017, and in the two months immediately after his appointment, shares surged more than 10%. However, they are down about 4% during his tenure. 

Screen Shot 2018 06 05 at 2.26.05 PM


Join the conversation about this story »

NOW WATCH: Millennials are leading an investment revolution — here’s what makes their generation different

Read the full article from it’s original source: http://uk.businessinsider.com/starbucks-stock-price-wall-street-shrugging-off-howard-schultz-departure-2018-6