Starbucks under pressure from activist investors over declining sales and share price
Wells Fargo has an Overweight rating on Starbucks on its view that a successful turnaround positions the business for a more achievable long-term path.
The flurry of activist activity comes as Starbucks sales have drooped in both the US and China.
Starbucks is under increasing pressure from activist investors as it grapples with declining sales and a sagging share price. The US-based coffee giant has seen its share price fall by about 20% year-to-date, and its sales have been declining in both the US and China.
The slump has prompted a flurry of activist activity, with several investors calling for changes to Starbucks' management and strategy. One of the most prominent activist investors is Elliott Management, which has reportedly built a large stake in Starbucks. Elliott is known for its aggressive approach to investing, and it has a track record of pushing for changes at companies in which it invests.
Starbucks has responded to the activist pressure by announcing a number of changes, including the closure of 150 underperforming stores and a reduction in its share buyback program. The company has also said that it will focus on improving its core coffee business and expanding its digital offerings.
It remains to be seen whether Starbucks' new initiatives will be enough to satisfy activist investors. However, the company's recent performance has been disappointing, and it is clear that it needs to make some changes to improve its sales and share price.
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