Shares of Starbucks Corp. SBUX and Chipotle Mexican Grill, Inc. CMG experienced a minor dip in pre-market trading following a change in leadership at Starbucks.
What Happened: As per Benzinga Pro, Starbucks’ shares were trading 0.99% lower during the pre-market session on Wednesday, following a 24.50% surge on Tuesday. Similarly, Chipotle’s shares were down by 0.33% in the pre-market session, after a 7.50% decrease on Tuesday.
The slight dip in both companies’ shares comes in the wake of Starbucks’ announcement that Brian Niccol, CEO of Chipotle, will take over as the new CEO of Starbucks, replacing Laxman Narasimhan.
Why It Matters: The CEO switch at Starbucks has been a topic of discussion among analysts. Analysts were divided on what Niccol’s appointment could mean for Starbucks. While Wedbush analyst Nick Setyan maintained a Neutral rating on Starbucks with an $80 price target, Baird analyst David Tarantino upgraded Starbucks from Neutral to Outperform and raised the price target from $81 to $110.
Jim Cramer, in his show Mad Money, discussed the significance of the new CEO for Starbucks. He believes that Niccol will be instrumental in reviving the coffee giant, which has been facing challenges in its major markets, the U.S. and China, reported CNBC. Starbucks recently reported a decline in same-store sales for two consecutive quarters.
Cramer said, “Brian Niccol is the key to a new Starbucks, one that can reclaim its old mantle as the ‘third place’ — you just need to know that this turnaround can’t happen overnight.”
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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