US stocks CMG vs SBUX
Hi Guys, interested in your thoughts on CMG now that the CEO has left to go to SBUX. Does this materially change your outlook for the stock (CMG) going forward? Conversely, does it also make SBUX a potential buy?
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Answer
Hi Alex,
The recent announcement of Brian Niccol’s departure from Chipotle Mexican Grill (CMG US) to become CEO of Starbucks (SBUX US) sparked a significant stock move for both companies, with SBUX surging ~25% and CMG falling ~15%. He may be a quality operator but that’s a lot of share price movement already built into both respective stocks.
- We continue to like CMG and see the pullback towards $US50n as a buying opportunity.
- CMG has a depth of talent internally, while they will have no trouble attracting external candidates.
- Its hard to get excited around SBUX as there coffees awful but after surging on the announcement we have to adopt a wait and see approach.
- More interestingly, and as an aside, Bill Ackmans Pershing Square (which we also own), has just bought into Nike (NKE US) – a stock we’ve been looking at for a long time as turnaround play.
