CEO Departure Doesn’t Diminish Our View of Starbucks
We’re maintaining our wide moat rating and fair value estimate for the company given its deep bench of management talent.
While most of the focus is rightfully on new CEO Johnson and his extensive consumer technology background, we remind investors that Schultz will still be involved with the development of Starbucks' premium Roastery and Reserve stores and that the management bench still features key executives like chief strategy officer Matt Ryan, Siren retail head Cliff Burrows, core retail head John Culver, channel development head Michael Conway, and CFO Scott Maw, each of whom we'd place at the top of their respective areas of expertise based on our previous interactions. For this reason, we don't equate Schultz's transition to that of 2000, when he assumed the chairman role and appointed Jim Donald as CEO (before eventually returning as CEO in 2008 following disappointing sales figures and a "watering down of the Starbucks experience" as Schultz described in a February 2007 memo to Donald).
Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.