Starbucks: Luring Brian Niccol Should Stimulate Sagging Coffee Chain

Leadership matters. Wide-moat Starbucks certainly isn’t through the weeds as it navigates an extremely challenging consumer environment, but the addition of Wall Street favorite Brian Niccol to the team stands to restore investor confidence in the battered brand. As we digest the news, we plan to maintain our respective $95 and $43 fair value estimates for Starbucks and wide-moat Chipotle (where Niccol will serve as CEO until Aug. 31, 2024) and our Exemplary Capital Allocation Ratings, although we will reevaluate our outlook for Chipotle once a permanent successor to Niccol is named. The burrito chain will be served in the interim by Chief Operating Officer Scott Boatwright, whose seven years of company experience, in tandem with retiring CFO Jack Hartung’s willingness to stay on “indefinitely” with the brand until a permanent CEO is announced, should assuage any immediate concern, despite Chipotle shares falling 13% during Aug. 13 intraday trading (Starbucks shares surged a striking 22%-23%).