Investment Followers Might Hate This Starbucks Stock News

Shares in Starbucks have dropped by 20% in recent months. Looking at a stock cart designed by Yahoo Finance, the news grows worse: When Starbucks was riding its 2021 peak in July, the price per share reached $126.06. At the time of this writing, it is $88.38 — slightly higher than mid-March's low of $79.29.

As Yahoo Finance reports, Jefferies analyst Andy Barish singles out three reasons for why many investors have decided to take a step back from Starbucks at this time. First, they are wary of Starbucks' employees' expanding union attempts. Moreover, he cites menu price increases and pandemic restrictions amid the Omicron variant's impact on China, as well as predictions about the company's 2022 performance that were made in a previous earnings call. Despite these points, Starbucks still reported a revenue of $8.1 billion in the last quarter of 2021. Even though the Omicron variant is surging in China — which represents Starbucks' second biggest market, as The Motley Fool explains — the company itself is still doing well financially.

The only point brought up by Andy Barish that Starbucks can actually tackle is the unionization attempts that are occurring in stores across the country. However, investors disagree on the nuances of the issue. Writing for The Motley Fool, Justin Pope deems unions a potential problem for Starbucks stocks in the long term. Still, he says, since only a small percentage of stores have pushed for unionization, investors shouldn't be too alarmed for now. The eventual worry, he writes, is that unions will raise operating costs to the point that customers would not want to buy drinks from Starbucks, hurting the company's sales.

Meanwhile, Yahoo Finance reports that "no other issue is bigger" for Starbucks than the union push: "If it continues to gain traction, it could dramatically alter Starbuck's margin structure." Finally, Trillium Asset Management pushed for Starbucks to be more neutral about the unions as public opinion has become more pro-labor in recent years, per CNBC. If Starbucks were to grow more aggressive in its anti-union tactics — the company has already been accused of union busting — it could drive sympathetic customers away.