Starbucks ETFs Soar, Chipotle Funds Plunge After CEO Shakeup
The coffee retailer has hired Chipotle CEO Brian Niccol for the same role.
Shares of Starbucks Coffee Company skyrocketed after the company announced that Chipotle CEO Brian Niccol would be taking over as CEO of the firm.
The stock was trading up by as much as 24% Tuesday morning, its largest daily gain on record. The surge underscores just how enthusiastic investors are about Niccol, a highly successful executive who helped spark a turnaround at Chipotle. (Starbucks lost some of its gains more recently but was still up 15%).
Niccol took over the CEO role of the Mexican restaurant chain in 2018, when it was struggling to recover from an E. coli outbreak that had devastated the company’s sales and reputation.
Since then, the stock has soared nearly 700% thanks to Niccol’s leadership, swelling Chipotle’s market cap from less than $9 billion to almost $70 billion in that timeframe.
Based on the stock’s reaction, investors in Starbucks are confident that Niccol could lead a similar turnaround at Starbucks, a company that has been struggling lately.
In its latest earnings report, Starbucks said that its global revenues had declined for a second quarter in a row. Sales at the coffeehouse have been pressured by rising competition and consumers frustrated by the company’s high prices.
Niccol will attempt to put Starbucks back on a growth trajectory.
Starbucks & Chipotle ETFs
There are currently 270 U.S.-listed exchange-traded funds that hold Starbucks stock. Its largest allocation on a percentage basis is in the Opal Dividend Income ETF (DIVZ), the Global X Millennial Consumer ETF (MILN) and the Hennessy Stance ESG ETF (STNC), which holds around 3% of their portfolios in the stock.
Starbucks is also a 2% holding in the popular VanEck Morningstar Wide Moat ETF (MOAT), as well as the VanEck Morningstar Wide Moat Value ETF (MVAL).
Meanwhile, Chipotle stock can be found in 251 U.S.-listed ETFs. Shares of the chain were down by as much as 14% on Tuesday due to disappointment over Niccol’s departure.
The AdvisorShares Restaurant ETF (EATZ), the Invesco Food & Beverage ETF (PBJ) and the Invesco Leisure And Entertainment ETF (PEJ) each allocate more than 4% of their portfolios to the stock.
