Starbucks (SBUX) will need time to “brew a fresh pot,” per Jefferies analyst Andy Barish.

On Tuesday before market open, Barish downgraded shares of the coffee giant to underperform, and lowered its price target to $76, citing “a lot of uncertainty over the next 12 months” following the “big run” in the past six weeks since Chipotle’s (CMG) Brian Niccol was named CEO.

Since Aug. 1, shares are up nearly 30% to around $95. In a note to clients, Barish said he expects “the stock will stall here and begin to retrace the ‘Niccol gains’ particularly as fundamentals become more of the focus.”

Niccol, who began in the new role on Sept. 9, has signaled that changes are to come. But changes will be challenged by bigger issues like operations, culture, value perception, and technology, said Barish.

He expects fiscal fourth quarter and fiscal year 2025 guidance to “disappoint,” with EPS growth in the low single digits and same store sales declining.

Barish calls 2025 a “throwaway” year where Starbucks attempts to reinvest and stabilize the business so it may rebound in fiscal 2026 and beyond.

In an open letter, Niccol said he’s been spending time in stores and with employees since he was announced as the next CEO on Aug. 13, 2024.

In the US, he acknowledged, “we aren’t always delivering. It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic.”

Last quarter, same-store sales declined 2% in the US. Those trends may have extended into the third quarter as its coveted pumpkin spice debut was met with lackluster foot traffic, per Jefferies and data analytic platform Placer.ai.

“Fourth quarter earnings per share on Oct. 30 is not going to be good,” Barish wrote. The insipid reception of pumpkin spice’s launch is an example of the challenges Starbucks is facing in the US, but he noted that “cost-reductions” during the former CEO Laxman Narasimhan’s tenure run could help earnings.

In the latest quarterly results, the company reaffirmed its 2024 guidance, which it revised following Q2, for the third time this fiscal year.

The company said it expects 2024 global revenue growth of low-single digits, down from the previous range of 7% to 10%, which itself was down from a prior guidance of 10% to 12%.

Global and US same-store sales were expected to see a low single-digit decline or stay flat, down from the previous range of 4% to 6% growth. China’s same-store sales are expected to see a single-digit decline, down from the previously expected low-single-digit growth.

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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