It’s now day-two on the news of the biggest CEO move of 2024. Starbucks Corporation (NASDAQ: SBUX) was the de facto winner over Chipotle Mexican Grill, Inc. (NYSE: CMG) as Starbucks CEO Laxman Narasimhan is out effective immediately and is being replaced by Chipotle’s Brian Niccol as CEO effective September 9, 2024. Oggonomics was not alone in witnessing billions in value added to Starbucks and billions in value lost at Chipotle on the news. Chipotle lost more than $5 billion in market cap and Starbucks added nearly $20 billion in market cap — all in a single day.
CEOs do, of course, matter. By how many billions of dollars in a single day may be a different tale. So which stock will be better off in a year?
Starbucks shares closed up a sharp 24.5% at $95.90 on Tuesday. That is now up 34% from its 52-week low of $71.55 seen in July. And the day-two reaction was down 0.5% at $95.45 shortly before the opening bell.
Chipotle shares tanked on day-one closing down 7.5% (-$4.19) at $51.68 after briefly trading as low as $48.00 at one point on Tuesday. Its shares were indicated up 1.5% at $52.46 ahead of the opening bell on day-two. Chipotle’s shares had traded as high as $69.26 in 2024 around its stock split, so now its shares are down just over 25% from its peak earlier this summer.
Perhaps Wall Street analysts have something to offer. It turns out that Chipotle did get more mixed calls. And Starbucks did get many more price target hikes. Still, not every analyst has treated these identically and there are going to be more analyst calls that come in over the course of the day.
ANALYST CALLS ON CHIPOTLE
Deutsche Bank maintained its Buy rating and kept its price target at $67, calling the sell-off as outsized and sees a buying opportunity.
Evercore ISI maintained its Outperform rating and cut its price target to $59 from $65.
Robert W. Baird maintained its Outperform rating but cut its target to $62 from $74.
Stephens & Co. maintained its price target at $61.
Stifel maintained its Buy rating and kept its price target at $70.
Truist Securities maintained its Buy rating and kept its price target at $69.
Wedbush Securities raised Chipotle to Outperform from Neutral and raised its price target to $58 from $54.
ANALYST CALLS ON STARBUCKS
Barclays reiterated its Overweight rating and raised its price target to $110 from $93.
Citigroup maintained its Neutral rating but still raised its price target to $98 from $82.
Deutsche Bank raised Starbucks to Buy from Hold and raised its price target to $118 from $85.
Evercore ISI raised Starbucks to Outperform from In-Line and raised its price target to $120 from $80.
Stifel raised Starbucks to Buy from Hold and raised its price target to $110 from $80.
TD Cowen (late Tuesday) raised Starbucks to Buy from Hold and raised its price target to $105 from $81.
