Starbucks looks attractive to BTIG with union complication fading
JohnFScott

The unionization efforts at Starbucks Corporation (NASDAQ:SBUX) have not been as big of a factor as feared a year ago when the campaigns at the first Starbucks stores began. Overall, union membership rate in the U.S. reached an all-time low last year, despite several high-profile campaigns like one at Starbucks grabbing attention. Union members fell to 10.1% of the overall U.S. workforce, according to the latest Bureau of Labor Statistics data.
269 Starbucks (SBUX) stores have been unionized to date, which is only about 3% of the locations in the U.S. In addition, no formal union contract is in place for the stores that did move forward with unionization and petition activity has slowed down.
Looking ahead, BTIG analyst Peter Saleh expects negotiations to continue for the balance of the year or until one side decides the cost of the ongoing campaign is greater than that of a contract agreement.
"While individual stores can technically vote to decertify their union one year after the initial vote, we believe this is unlikely. We also believe the union has little leverage with customers, as our proprietary survey indicates they are unlikely to abandon Starbucks or change their habits if a labor agreement is not reached."
The firm kept a Buy rating and SBUX and raised its price target to $120 as pointed to a sales recovery and ramping earnings momentum.
Starbucks (SBUX) is lined up to report earnings on February 2. The coffee chain gain has beat revenue expectations in four straight quarters and EPS marks in 10 of its last 12 reports.