China's reopening vs. mounting union pressure. Should you buy Starbucks here?
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Starbucks (NASDAQ:SBUX) stock has been on the rebound in recent weeks, helped by news that itâs reopening stores in China after widespread COVID closings. Still, shares remain down by nearly 40% from its 52-week high, hurt by inflation, an uncertain economy and concerns about mounting unionization pressure.
Given the current market conditions, should you buy shares of the coffee chain? 
Union Push Vs. China's Reopening
As of Tuesday, shares of the famous coffee purveyor have declined 32% since the start of the year. However, the stock has shown near-term momentum.
While it has risen just 4% over the past 30 days, this compares generously with its main competitors. Rival Dutch Bros (BROS) has fallen 12% over the same time and Tim Hortons owner Restaurant Brands International (QSR) has generally moved sideways.
Meanwhile, SBUX has bounced back 16% from the 52-week low of $68.39 it hit on May 12, closing at $79.33 on June 7.
Starbuckâs shares got a boost last week on news that the company was finally reopening 600 stores in China that had been closed or disrupted by pandemic-related restrictions. The company operates around 940 stores in China.
SBUX's Chinese operations have been considered a major growth driver for the company. During the companyâs recent earnings call, interim CEO Howard Schultz said that he expects the companyâs Chinese business to eventually be bigger than its US business.
The stock was also stoked last month by news that Schultz had recently bought the dip, purchasing around 210K Starbucks shares for roughly $15M. Schultz, who founded Starbucks, returned to helm the company in March, replacing Ken Johnson. The company announced this week that it plans to identify a new CEO by fall.
SBUX stock has climbed despite a growing movement amongst its workers to unionize. Since one of its stores in Buffalo, N.Y., voted to unionize last December, around 100 stores have followed suit, with another 120 scheduled to vote on the issue, according to a recent CNBC report. Starbucks operates around 9,000 company-owned stores in the US.
Union activity has also generated some negative headlines for the company, which has prided itself on providing better wages and working conditions that its fast-food competitors. Last month, federal labor officials filed a complaint against Starbucks over its handling of the unionization effort in Buffalo.
The company has asserted its stores function better without a union and plans to roll out improved benefits to attract and retain workers. But the movement continues to gain traction, with stores in Louisiana and Alabama voting to unionize over the past few weeks.
Is SBUX a Buy?
Some analysts see unionization as more of a public relations issue, with concerns about rising labor costs pressuring margins overdone.
 "Given that SBUX already pays ahead of the industry, we see the risk from unionization as reputational in nature. While declines in consumer favorability have followed increases in media coverage of the unionization push, they have been modest and temporary in nature,â wrote Bank of America analysts in a note released around May 26.
Wall Street analysts, on average, rate Starbucks a Buy. Of the 34 analysts tracked by Seeking Alpha, 17 rated the stock a Buy or Strong Buy and 17 have it as a Hold. None rated it a Sell. SA authors also rate it a Buy.
The companyâs quant rating system, however, shows SBUX as a Hold, as of June 8. While Starbucks earned an A+ for profitability, it also received a C for momentum, C- for growth, D+ valuation and D- for revisions.
For a more in-depth look at Starbucks, check out SA contributor Asif Suriaâs âInsider Weekends: First Insider Purchase at Starbucks in Nearly 4 Yearsâ or SA contributor Strategy Docâs âStarbucks: A Three-Time CEO for the âThird Placeââ.