Starbucks Corporation SBUX shares traded lower by 2.8% on Friday after the company named Laxman Narasimhan CEO, but according to one Wall Street analyst, the Seattle-based coffee giant is in good hands.
The Analyst: Bank of America analyst Sara Senatore reiterated her Buy rating and $109 price target for Starbucks.
The Thesis: Prior to joining Starbucks, Narasimhan served as CEO of Reckitt Benckiser Group for three years. Before that, he held several executive positions at PepsiCo Inc. PEP.
Narasimhan has demonstrated his experience in international markets and his ability to scale a large organization, Senatore explained.
"While Narasimhan lacks the retail/restaurant experience that we might have hoped for, we believe investors hold him in high regard," Senatore said, citing how Reckitt stock declined after his announced departure.
The Reckitt stock sell-off is a stark contrast to the negative reaction of Starbucks shares when the company announced the appointment of Kevin Johnson as CEO in 2015, Senatore added.
Benzinga's Take: Investors shouldn't read too much into the negative reaction from Starbucks stock on Friday given the broad market weakness on the day. The market will have plenty of time to digest Narasimhan as the new Starbucks chief before he officially takes over the role in April 2023.
Photo: Engin Akyurt from Pixabay.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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