Starbucks service plan prompts surprising analyst stock-price-target revisions

Starbucks service plan prompts surprising analyst stock-price-target revisions originally appeared on TheStreet. Have a seat and let Brian Niccol tell you all about his big ideas for Starbucks (SBUX) . Actually, seats are a part of the "Back to Starbucks" plan as the chief executive of the world's largest coffee chain looks to turn around a decline in foot traffic and sales. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 Niccol, who joined from Chipotle in September, said that pulling back on in-store seating was one of the company's biggest missteps, and he wants to fix that. "We had this strategy that I think was just a misfire of a purpose-driven store.

It's like, well, the purpose is community connection," Niccol told Axios. "I think that's what got us off our game. We've got to get the seats back."Starbucks CEO Brian Niccol at the Golden Bear Pro-Am golf tournament in Dublin, Ohio, on May 28, 2025. Niccol is making major changes at the coffee chain.Michael Reaves/Getty Images Niccol made his comments during the company's Leadership Experience in Las Vegas, where Starbucks hosted more than 14,000 store managers. "It's time for us to lead again," Niccol told the crowd.

"We’re going to lead in warm, welcoming coffee houses. We’re going to lead in innovation. Innovation to our menu." Former Starbucks CEO does a cartwheel In the past several months Starbucks reintroduced condiment bars and ceramic mugs for in-house sipping, brought back handwritten notes on to-go cups and bags to foster better customer-barista connections, and returned free in-café refills to make its coffee shops feel more like homes. The Seattle coffee giant also refreshed and simplified its menu, discontinuing 13 items and eliminating extra charges for milk alternatives. In addition, the company plans to add full-time assistant managers across the U.S.

to help busy stores run more smoothly. Former Starbucks CEO Howard Schultz reportedly was so thrilled with the strategy that he "did a cartwheel in my living room" the first time he heard about it. "It was so brilliant. It's short, to the point and it's exactly to the tip of the spear who we should be and who we are," Schultz said. "And we are, above all else, a coffee company." Related: Starbucks makes huge investment to solve a key problem Niccol told Reuters that he would accelerate the rollout of the coffeehouse chain's new staffing and service model, aiming for all North American stores by summer's end.

The initial plan called for just a third of U.S. stores by fiscal year-end. The Green Apron model includes in-store technology to more efficiently sequence orders, as well as dedicated baristas for drive-through orders. Starbucks initially rolled out the service changes to 700 stores. Story Continues From a single store in Seattle in 1971, the company now has more than 40,000 outlets worldwide.

During the company's April 29 quarterly earnings call, Niccol said it would be introduced in a third of U.S. stores by fiscal year-end. Starbucks used the Las Vegas event to unveil a generative AI assistant created with Microsoft (MSFT) Azure’s OpenAI, according to CNBC. It plans to roll out the system to 35 locations in June. Analyst: Starbucks turnaround will take time A broad launch of what it calls the Green Dot Assist platform across the U.S.

and Canada is slated for the company’s fiscal 2026, which starts in the fall. Starbucks stock is up 3.1% in 2025 and up nearly 18% from a year ago. Citi analyst Jon Tower raised the investment firm's price target on Starbucks to $95 from $84 and affirmed a neutral rating on the shares, according to The Fly. The analyst also added an "upside 90-day short-term view" on Starbucks. The company's pull-forward of labor investment back into stores will likely lead traffic to recover more quickly, the analyst estimates.

Tower said that while the cost of this investment remains unclear, the improvement in one-year traffic trends, particularly given soft comparisons, will likely drive the shares higher in the near term. Related: Starbucks reveals big change for baristas, customers But he also said Starbucks's turnaround narrative remains "this will take time," as sales are emphasized before profit margins, and its long-term profitability remains unclear. RBC Capital boosted its price target on Starbucks to $100 from $95 while reiterating an outperform rating. The firm said it was encouraged following the presentations at the company's Leadership Experience. The accelerated labor deployment in particular suggests that management has increased confidence in their new strategy, translating to potential upside in revenue, RBC said.

Ahead of the event, investors' expectations around fiscal 2026 earnings per share were depressed, since they considered that it would be another investment year, followed by more material traffic improvement in fiscal 2027, RBC added. Related: Fund-management veteran skips emotion in investment strategy Starbucks service plan prompts surprising analyst stock-price-target revisions first appeared on TheStreet on Jun 14, 2025 This story was originally reported by TheStreet on Jun 14, 2025, where it first appeared. View Comments