We have heard before about how coffee giant Starbucks (SBUX) plans to revitalize its brand image. But new CEO Brian Niccol has been starting to put together more specific ways it looks to do exactly that. Investors are cautiously optimistic, and shares are responding accordingly, up fractionally in Friday afternoon’s trading.
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This is all still fairly early-days material here. After all, Niccol has only been CEO since September 2024, which puts him at just a little over six months into the job. But give Niccol credit; he is going after the low-hanging fruit immediately, and his biggest target so far might be the mobile ordering system.
Starbucks’ mobile ordering system, oddly, was actually a victim of its own success. Back in 2017, when Starbucks got its mobile ordering systems up and running, it turns out that it worked far too well. Customers were placing orders online, coming in, and causing a series of “traffic jams” around barista stations. People who placed orders in store found themselves at the back of a long line they could not even see.
Fixing the Problems
Thus, Starbucks is trying to speed up order processes. It is getting rid of several menu items to simplify ordering and production, and is also putting some production back in customers’ hands by bringing back “condiment bars,” allowing the customer to handle some of that work themselves. He also wants to keep up the practice of baristas writing on cups; this personal touch may add time to the process, but it is time that can be saved elsewhere. That personal touch is valuable.
Customers are not exactly helping this process. Reports suggest that a new “compostable” cup is meeting with outright fury from customers. Apparently, the cup’s opaque design prevents visual analysis of the beverage, which means that a “shaken espresso” may never be “properly layered” ever again.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 15 Buy, five Hold and one Sell recommendations assigned in the past three months, as indicated by the graphic below. After a 1.96% rally in its share price over the past year, the average SBUX price target of $110.70 per share implies 2.98% downside risk.
