Jim Cramer: Starbucks’ stock will shoot higher under incoming CEO Brian Niccol
Shares of Starbucks will bounce back under incoming CEO Brian Niccol, Jim Cramer said Monday. The former Chipotle chief executive will fix the long lines and wait times for Starbucks customers that has hurt sales. Improvements made to the company’s in-store experience should boost demand and eventually drive shares of the coffee chain higher. Jim pointed to Niccol’s track record improving Chipotle’s store efficiency and customer throughput. “I have such faith in Brian Niccol,” he said. “If you sell [this stock], you’re going to miss a definitive move by a guy who’s actually about throughput.” He added: “His strength is throughput and that’s been a problem [for Starbucks].” Starbucks announced it would replace former CEO Laxman Narasimhan with Niccol earlier this month following several quarters of lagging growth in key markets like the U.S. and China. Niccol assumes the role on Sept. 9 and investors already seem upbeat on the switch. Starbucks had its single best session in history on the Aug. 13 news, sending shares up 24.5%. The stock has continued to climb higher since the announcement, up 3.5% in the past five days and 1.5% during Monday trading. The stock is still more than 18% below its July 2021 record closing levels of around $117 apiece. Overall, it’s a crucial time for Starbucks and Niccol is key to the company’s turnaround story. Management has posted two straight quarters of same-store sales declines. Prior to the Aug. 13 move higher, shares tumbled 21% during Narasimhan’s leadership. “Brian Niccol is the key to a new Starbucks …You just need to know that this turnaround can’t happen overnight,” Jim said recently . “But, I’m telling you, it’s going to happen.”
