New recruits still struggle to reverse the declining trend of growth, Starbucks Corporation (SBUX.US) suffered a brutal cut in target price by institutions.

When Starbucks Corporation (SBUX.US) appointed Brian Niccol as the new CEO to lead the reform action in August, Wall Street praised it and the company's stock price rose. Since Niccol's appointment was announced in August, Starbucks Corporation's stock price has soared by 28%. Prior to this, the stock had plummeted by over 19% and was expected to decline for the third consecutive year before rebounding into positive territory. Three months later, the cheers gradually faded. For example, Edward Lewis, a Redburn Atlantic analyst, advised investors to sell shares of this coffee chain. The firm downgraded Starbucks Corporation's rating from "Neutral" to "Sell" and significantly reduced their target price from $133 to $77, implying a 22% decline in the company's stock price over the next 12 months from Tuesday's closing. In Lewis' report on Wednesday, he stated, "In our view, the cost of the economic recovery has not been fully reflected in the consensus. In addition, due to the high expected P/E ratio of the stock, there is almost no room for error." After another disappointing earnings result in October, Niccol announced his plan to turn Starbucks Corporation profitable. His strategy involves simplifying the menu, reducing service time, and personalizing the experience by writing customers' names on coffee cups. Lewis stated that costs have been Starbucks Corporation's "Achilles' heel" since 2017, with store operating expenses exceeding revenue growth every year. He added that he believed a similar situation would arise now as well. Due to the company retracting its 2025 fiscal year guidance, limited visibility is also a concern. Lewis said Niccol's experience at Taco Bell and later at Chipotle Mexican Grill, Inc. would buy him time to revitalize Starbucks Corporation. Nevertheless, the company Niccol took over has struggled to achieve sustained growth, retracting long-term profit guidance twice since 2020 and experiencing negative comparable sales in the U.S. for three consecutive quarters. Redburn Atlantic is one of the six companies tracked by Bloomberg that recommend selling Starbucks Corporation stock. Prior to announcing recovery plans and the latest earnings report, the company only had three.