Starbucks’ stock fell Tuesday in the Seattle coffeehouse chain’s first day of trading since longtime executive Howard Schultz said he would step down as chairman of the board in June.
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Shares dropped 2.44% to $55.68 on the news of Schultz’s departure. The 64-year-old executive, who served two stints as Starbucks CEO and has been executive chairman since 2016, was instrumental in the chain’s transformation into a global brand, with more than 28,000 locations worldwide.
Schultz said he is undecided about his next career move. However, it is widely speculated that Schultz, a prominent critic of President Donald Trump, is weighing a presidential run in 2020 on the Democratic ticket.
Starbucks announced Schultz’s departure weeks after it overhauled its store policies after two customers were arrested at a Philadelphia location. The chain now says it will allow visitors to remain in the store regardless of whether they have purchased an item, though drug use and disruptive behavior will not be permitted.
While Schultz’s departure impacted share prices, Wall Street remains optimistic about Starbucks’ future. UBS maintains a price target of $66 per share, arguing that Starbucks’ “long term outlook remains attractive.”
"We expect shares will come under modest initial pressure given the departure of such a unique talent and visionary, but quickly return to trading on expectations for near-term fundamentals,” UBS analysts said in a research note.
Myron Ullman, the former CEO and chairman of J.C. Penney, will replace Schultz as Starbucks’ chairman. Starbucks shares have risen 21,000% under Schultz since its initial public offering in 1992.