We all know that stocks can go down for just about any reason at just about any time. Coffee giant Starbucks (SBUX) recently saw a major drop itself, and shareholders are not happy. In fact, some of those shareholders are planning a lawsuit against Starbucks, and a federal judge is allowing it to go through. Other shareholders, though, were oddly optimistic, and shares ticked up in Thursday afternoon’s trading.
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United States District Judge John Chun in Seattle announced late Wednesday that the planned lawsuit could go through, and investors would get a chance to prove that Starbucks defrauded shareholders by covering up a sales drop in the United States and in China as well. When Starbucks later showed the surprise drop in sales, it prompted a substantial drop in stock as well, down 16% shortly after.
Chun also noted Starbucks could be sued for its remarks in a 2024 regulatory filing, which noted there were “no material changes” involving risks impacting the business. The judge even opened up a potential suit against former CEO Laxman Narasimhan. Though the ruling did not go entirely shareholders’ way, as Chun reportedly dismissed several potential claims. Starbucks reps noted that the company would continue its defense against these allegations, which should surprise virtually no one.
Cup Size Matters
You may have noticed, with some drinks, that the shape and size of the container from which you drink has an impact on the taste. I have noticed this myself with several drinks. Some drinks actually do taste better from a certain shape of glass. But a recent report says that Starbucks is no different, and the size of drink you order can radically change the taste.
The report in question, staged by a TikToker named Shannon, revealed that it is a combination of factors, including percentage of espresso involved, as well as amount of syrup used. The Short drink at eight ounces uses just one shot of espresso. Grandes and Ventis, meanwhile, use two. Further, Starbucks drinks standardize on the same amount of syrup across sizes, which means the Venti has just as much syrup as the Short, fundamentally changing the taste. And, just to complicate things further, a Starbucks barista reportedly responded, noting that this formula is only valid for hot drinks.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 12 Buys, seven Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 16.37% loss in its share price over the past year, the average SBUX price target of $95 per share implies 13.6% upside potential.
