Starbucks Turns Around Under New Leadership: 1-Year Check-In Since CEO Shake-Up

Starbucks has been in turnaround mode since CEO Brian Nichols took over a year ago. He has brought back condiment bars, reduced menu items, and improved mobile order wait times. The overall business hasn't turned the corner yet, but the stock's valuation reflects hope for better results in the next 12 months. Nichols has introduced new menu items, such as coconut water infused coffee, and is reviewing the China business. The stock is valued as a growth stock and is trading at a premium to the broader market.

Wall Street analysts are increasingly optimistic about Starbucks' turnaround under CEO Brian Niccol. The company's stock saw a 2% gain on Tuesday after Baird analysts upgraded the stock to an "outperform" rating, raising their price target to $115 per share from $100 [1]. This upgrade reflects growing confidence in Niccol's "Back to Starbucks" plan, which aims to restore the coffeehouse feel and improve service speed.

Niccol's turnaround strategy includes rolling out a new "Green Apron" service model, which has shown promising results in initial test locations. According to Niccol, there has been a "double-digit improvement in cafe orders handed off in under four minutes, with 80% of in-cafe orders now meeting that target" [1]. The company is accelerating the rollout of this model to all U.S. stores ahead of schedule, aiming to complete it by mid-August.

Baird analysts expect these changes to stabilize same-store sales this quarter and noticeably improve them next year. They also anticipate investments in staff balanced by major cost cuts in areas like overhead, setting the stage for stronger profits over time. Additionally, any deal to sell a stake in Starbucks China could be worth billions [1].

The stock's premium valuation is being justified as signs of progress emerge. Baird anticipates stronger U.S. comparable sales emerging in fiscal 2026, modeling growth of +3% in the first quarter and +5% in the second quarter after flat comps in late 2025 [2]. The firm expects improved transparency on store-level labor investments and further details on cost-saving opportunities in upcoming quarters.

While the overall business hasn't turned the corner yet, the stock's valuation reflects hope for better results in the next 12 months. Starbucks is expected to report earnings in late October or early November, and the company plans to host an Investor Day in early next year.

References:
[1] https://www.cnbc.com/2025/08/12/wall-street-analysts-gain-confidence-in-ceo-brian-niccols-starbucks-turnaround-plan.html
[2] https://ca.finance.yahoo.com/news/baird-high-conviction-starbucks-turnaround-153607878.html