Starbucks shareholders and customers have one key thing in common — it just doesn’t feel like the same company that it used to be. Going into a Starbucks just doesn’t feel as fun, with the company having moved from wood to more like a cafe set up in a medical clinic with so much white and cream everywhere. I mean, what if someone spills coffee? And investors are no longer seeing those endless growth gains from prior years. Starbucks Corporation (NASDAQ: SBUX) decided it was time to listen to activists and tactical investors now have to decide how they want to handle this massive change that has been delivered.

Starbucks announced that CEO Laxman Narasimhan is out — effective immediately. The surprise is that his successor has already been named, and he is a big name now in restaurant world. Brian Niccol, CEO of Chipotle Mexican Grill, Inc. (NYSE: CMG) is stepping in as Starbucks’ CEO effective September 9, 2024.

Where Tactical Bulls is focused now is how this massive management change was immediately championed by Wall Street investors. Starbucks shares closed up a sharp 24.5% at $95.90 on Tuesday, and that’s now up 34% from its 52-week low of $71.55 seen in July.

Chipotle shares bore the brunt of the news with its shares closing down 7.5% (-$4.19) at $51.68 after briefly trading as low as $48.00 at one point on Tuesday. Chipotle’s shares had traded as high as $69.26 in 2024 around its stock split, so now its shares are down just over 25% from its peak earlier this summer.

There is now a dual role for tactical investors. They can choose Starbucks or they can choose Chipotle. Then again there is a third option of choosing to own both stocks!

Where this matters for tactical investors looking for outpaced upside is whether or not Chipotle or Starbucks is now a better buy for the next year. Starbucks just had more than a 20% instant gain, and Chipotle’s stock just went even further in the doghouse. So how is management going to be until the actual changes are made?

Rachel Ruggeri, CFO of Starbucks, will handle the interim CEO role until Niccol steps in on September 9. Chipotle’s Chief Operating Officer, Scott Boatwright, will serve as interim CEO of Chipotle until a permanent successor is named.

Starbucks’ sales have struggled to keep Wall Street investors that happy in recent quarters due. The company has faced more domestic competition as a 3% decline in same-store sales doesn’t excite anyone when operating costs are higher. Starbucks has also had problems with demand in a struggling China market that represents its second largest market. Narasimhan took over as Starbucks CEO less than 18 months ago.

Activist investor group Elliott Management had recently acquired a stake in Starbucks earlier this summer. And activist investor group Starboard Value has also reportedly acquired a stake in Starbucks even more recently. These two now sit on handsome profits simply by the CEO change. Narasimhan was CEO of Reckitt before joining Starbucks, and running brands like Lysol and Mucinex may not exactly have been the best fit to run a retail coffee destination like Starbucks. Still, he did have the blessing of Howard Schultz coming into the job last year. But now Schultz has already jumped ship by being critical in 2024 and he has now fully endorsed Niccol as the man for the CEO job at Starbucks.

The analyst at Piper Sandler immediately gave the news a blessing, raising the Starbucks rating to Overweight from Neutral and raising the price target up to $103 from $85 in the call.

The team at Truist Securities maintained its Buy rating and $69 price target on Chipotle after the news broke.

Many more analyst calls are coming on Wednesday as the research teams are already adapting late-July calls after Chipotle’s earnings report. And now for the big question — can a new CEO of Chipotle still double Chipotle’s store counts ahead?

Chipotle was already recently a battered stock ahead of the news, but the company’s flow of news was still better off than Starbucks’ news flow had been in 2024. Now it boils down to whether or not a new CEO of Chipotle can come in and keep the growth engine running for the years ahead. Let’s just say that it is not the norm for a CEO of one company already deemed a flagship winner by investors to jump to another company needing another turnaround sort of in the same space but not really competing head-to-head in the same subcategories of casual dining and to-go.