Starbucks is on watch with update on guidance, initiatives and new CEO on tap for next month
Scott Olson

Starbucks Corporation (NASDAQ:SBUX) has a significant catalyst coming up in a few weeks when the company holds its Investor Day event.
The event will feature presentations, as well as a question and answer session with the companyâs senior leadership team members, including Howard Schultz, interim chief executive officer, and Rachel Ruggeri, chief financial officer.
Cowen analyst Peter Charles sees upside for shares if a new CEO with a strong track record is selected and long-term operating margin guidance is provided containing 17% in the range.
Charles and team ascribe a 50% probability that Schultz's successor is named at the event and thinks it is unlikely an internal successor is the pick. Some potential picks include former Ulta CEO Mary Dillon and Starbucks' former CFO Troy Alstead. The firm said it would be discouraged if board member and former Domino's CEO Ritch Allison was selected given a rocky track record at Domino's.
On the margin front, SBUX has indicated 2023 guidance will be issued at the meeting. Cowen expects the coffee chain giant to reiterate previous long-term guidance of 4% to 5% U.S. comparable sales growth and ~6% net restaurant growth. The guidance range given for 2024-2025 EPS growth will also be key, with 10% to 12% the prior target and +15% the level seen satisfying analysts.
Cowen thinks Starbucks (SBUX) will also use the event to discuss the future of the drive-thru business.
"We are curious to learn elements of the drive-thru of tomorrow that Starbucks can adopt to drive efficiencies and improve the store-level employee & customer experience: mobile order pick-up spots, A.I. voice ordering, double lane drive-thru's, license plate recognition, etc."
Starbucks (SBUX) could also issue more details about on-trend initiatives like iced & plant-based beverages, broadening payment options beyond a Starbucks gift card for customers to join the My Starbucks Rewards loyalty program, and making digital ordering more frictionless.
Cowen has an Outperform rating on SBUX and price target of $104.
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