Jim Cramer disagrees with TD Cowen’s call on Starbucks stock

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Written on Sep 19, 2023

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TD Cowen analyst Andrew Charles downgraded Starbucks on Tuesday.
Jim Cramer says he would rather buy shares of the coffee chain here.
Starbucks stock has been in a downtrend over the past four months.

Starbucks Corp (NASDAQ: SBUX) has been a big disappointment for its shareholders in recent months but Jim Cramer is convinced that the worst is now in the rearview mirror.

Why is Cramer bullish on Starbucks stock?

Interestingly, Andrew Charles – a TD Cowen analyst downgraded the coffee chain this morning to “market perform” citing uncertainty in China.

But the Mad Money host sees China fears as already priced in. On CNBC’s “Squawk on the Street”, he said today:

The albatross of China weighed on the stock from [early May]. This is when you make a contrarian call.

Last week, Howard Schultz left the multinational’s board as well (read more). But Cramer remains constructive on Starbucks stock because he has confidence in the leadership of the company’s new CEO Laxman Narasimhan.

Even TD Cowen sees upside in Starbucks stock

It is worth mentioning here that Andrew Charles trimmed his price objective on Starbucks stock to $107 today – but that still represents about a 14% upside from here.

Earlier this year, the coffee chain reiterated its commitment to reaching 9,000 stores in China by 2025. Cramer sees it as a good investment despite macroeconomic uncertainty in China because:

This is one of the few companies that are still employing. So, call me a buyer here.

Note that his Charitable Trust has a position in Starbucks Corp since August of 2022. The Nasdaq-listed firm is expected to earn 96 cents a share in its current financial quarter versus 81 cents per share a year ago.