The Pumpkin Spice Latte is making a comeback at Starbucks next week. And when it does, it could give the company’s stock price a much-needed boost, according to analysts.
CNBC’s Jim Cramer and Real Money colleague Tim Collins said on Tuesday in a CNBC report that the popularity of Starbucks’ Pumpkin Spice Latte could give the company’s stock a “shot in the arm.” The analysts reasoned that Starbucks “was the original pumpkin spice pioneers,” a status that ostensibly makes for a strong showing at retail.
Starbucks shares are trading at $53.02. Starbucks stock has been on the rise in the last two months, but still far from its 52-week high of $61.94.
While the Pumpkin Spice Latte might bring more people into its locations, coffee prices might boost its earnings. According to Collins, coffee prices are trending down, reducing Starbucks’ costs and improving its margins. That, coupled with an expected increase in sales from the Pumpkin Spice Latte, could make for strong earnings in the next quarter.
Still, Cramer cautioned that the Pumpkin Spice Latte isn’t a silver bullet. He noted that the seasonal drink’s debut in years past hasn’t always translated to a jump in the stock price. Other factors, including the slumping stock price and his belief that investors are still overselling the stock, could translate to an increase this time around.
Collins believes Starbucks shares will hit $57 “in the near future” and potentially reach the $60 mark by Thanksgiving, according to CNBC.