Starbucks looks to move past the unionization anxiety hanging over the stock
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While the Senate testimony of Starbucks' (NASDAQ:SBUX) Howard Schultz during the week was highly-anticipated, Cowen analyst Andrew Charles called it a non-event in terms of how investors should view the stock.
Schultz's vigorously defended the longtime Starbucks' (SBUX) culture of treating employees well with his testimony that recounted his humble beginning. He also compared the employee benefits at Starbucks to other retail chains. A new disclosure was that Starbucks (SBUX) now has an average hourly wage of $17.50 per hour or close to $27 per hour when benefits are included. The former Starbucks CEO acknowledged the workers right to unionize and said the coffee giant is prepared to begin the bartering process.
Separately, Starbucks shareholders approved a proposal for the coffee chain to conduct an independent assessment of its labor practices as it deals with the newly unionized U.S. cafes. Starbucks (SBUX) reiterated that it is now undertaking an independent, third-party human rights impact assessment, which will include a review of the principles of freedom of association and the right to collective bargaining.
Looking ahead, Cowen analyst Andrew Charles thinks unionization is declining in importance to the SBUX narrative given only about 300 stores out of 9.3K U.S. company-operated have voted to unionize and the pace is slowing. The firm has an Outperform rating on Starbucks (SBUX) and price target of $116.
Read why Seeking Alpha analysts Luca Socci and Daniel SchÃ¶nberger have Buy ratings on SBUX. Dig into why the Seeking Alpha Quant Rating is only at Hold.