11:49 AM EDT, 08/14/2024 (MT Newswires) -- Starbucks' ( SBUX ) appointment of Brian Niccol as the new chairman and chief executive is set to boost the company's brand and growth prospects, increasing confidence in its multi-year outlook, UBS said in a note Tuesday.

Analysts, including Dennis Geiger, said Chipotle Mexican Grill's ( CMG ) Niccol was long on investors' "wish list" hire for the cafe company. The stock has surged more than 20% following the announcement, reflecting investor excitement over this leadership change and the potential for improved growth, they added.

"While we're anxious to hear Niccol's assessment of the brand, biggest opportunities, and key points of strategic focus, we anticipate an emphasis on the partner and customer experiences and initiatives to drive customer demand and traffic. Revenue growth, margin opportunities and long-term earnings power are all likely to be resulting points of focus," the analysts said.

Niccol's impact on employee benefits and culture at Chipotle is particularly relevant for Starbucks ( SBUX ), according to the analysts.

The analysts also said Starbucks ( SBUX ) is well-positioned for long-term success in the US and internationally, with challenges including recent declines in traffic and sales in the US and China. While sales may stay under pressure in the short term, investors are looking to Niccol to outline his strategies for overcoming these challenges.

UBS has a neutral rating on the company's stock, with a price target of $85.

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