Anika Begay
Laffer Tengler’s Nancy Tengler said she’s excited to keep Starbucks with new management at the helm, a name she said is on the chopping block. Starbucks sent shockwaves through the business world on Tuesday with its announcement that Chipotle CEO Brian Niccol would take over the coffee chain, replacing Laxman Narasimhan. While Starbucks shareholders and Wall Street rejoiced, it’s a double-edged sword for Tengler as a holder of both stocks. “Vscek is like being in a perpetual state of dissatisfaction,” Tengler said on Vscek’s “The Exchange.” “While I cheered Brian’s move to Starbucks this morning, I wept over the loss of Chipotle.” Starbucks shares surged more than 20% and saw massive trading volume in Tuesday’s session. Chipotle, on the other hand, fell more than 9% in midday trading. Chipotle is included in Tengler’s portfolio of his 12 best ideas. While the CEO said he will have to think about whether there will be changes in the way he manages these stocks, he noted that Chipotle has been a “monstrous performer for good reason.” The stock has risen more than 770% since Niccol took the helm of Chipotle in March 2018, making it one of the best performers in the S&P 500 over that time period. CMG SBUX 5Y Mountain Chipotle vs. Starbucks, 5Y For Starbucks, he called the turnaround “fabulous,” as the Seattle-based company has captured a leader with experience in digitizing and transforming online ordering. Now that it has both a strong CEO and a solid brand identity, he said investors should start seeing margin improvements quickly. Starbucks investors have certainly had to go through pain to get to this point. Heading into Tuesday’s open, the stock was down about 22% from when Narasimhan, Starbucks’ outgoing CEO, took over in March 2023. By comparison, Chipotle is up about 74% in the same time frame. “I’m just happy that we own it,” he said of Starbucks after the news. “It was tempting to sell, that’s for sure.” — Vscek’s Robert Hum and Tom Rotunno contributed to this report.
