03:11 PM EST, 11/15/2024 (MT Newswires) -- Starbucks ( SBUX ) can control many of the headwinds it has faced recently, and has a chance to "meaningfully reaccelerate" the business under its new chief executive, RBC Capital Markets said Friday.

Brian Niccol joined the coffee giant as CEO and chairman in September from burrito chain Chipotle Mexican Grill (CMG). Niccol succeeded Laxman Narasimhan as Starbucks' ( SBUX ) CEO.

Late last month, the company reported that its fiscal fourth-quarter global comparable store sales dropped 7%, steeper than a 6.5% decline modeled by analysts polled by Capital IQ. North America and US comps decreased 6%, while China tumbled 14%.

"It is clear we need to fundamentally change our strategy to win back customers," Niccol said at the time.

RBC assumed coverage of the Starbucks ( SBUX ) stock at an outperform rating, with a $115 price target.

"We believe there's meaningful opportunity to improve store operations and consumer brand perception where we have confidence the new CEO can turn the business around," RBC analyst Logan Reich said in a Friday note to clients. Some of the headwinds aren't specific to Starbucks ( SBUX ), Reich said, adding that it might take "a few quarters" for the company's US business to return to growth.

Starbucks' ( SBUX ) fiscal 2024 GAAP operating margin fell 130 basis points year over year to 15% amid investments in store partner wages and benefits, as well as increased promotional activity.

RBC doesn't see any year-over-year margin improvement until the fourth quarter, though "there could be a steeper ramp" of margin expansion in 2026 than implied by current consensus, according to the note.

The brokerage said it continues to be "optimistic that an eventual rebound" in China will allow for a return to double-digit growth in that market amid increasing urbanization and coffee adoption.

"We acknowledge the path forward will likely be volatile, but believe the bar is low," Reich wrote. "A partnership in China could reduce what's been an overhang on the business which we think would be an incremental positive."

Price: 98.73, Change: +0.11, Percent Change: +0.11