Starbucks Loses Pershing Square as an Investor After Bill Ackman Sells Stake

Activist investor Bill Ackman announces his Pershing Square Capital Investment firm exited its stake in Starbucks.
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Shares of coffee giant Starbucks (SBUX) - Get Report were falling Wednesday after activist investor Bill Ackman announced that his Pershing Square Capital Investment firm exited its stake in the company.

Speaking at an investment presentation, Ackman said that Starbucks is “firing on all cylinders,” leading him to conclude that now is the time to get out, according to Bloomberg.

Pershing’s Starbucks investment returned 73% over 19 months, a signal that positive returns could “become more modest,” according to Ackman.

The downturn may have already begun, with Starbucks trading down about 0.3% year to date after rising more than 30% over the past 12 months.

Meanwhile, Ackman said that he will continue to invest in Chipotle Mexican Grill (CMG) - Get Report and Agilent Technologies (A) - Get Report. In fact, for the latter, Ackman said that he sees “substantial opportunity” for improvement in Agelent’s business performance.

Chipotle, on the other hand, has been one of the market’s top performers over the past couple of years after bottoming out in early 2018 at $255.46.

On Tuesday, Chipotle reported fourth-quarter net income that more than doubled as revenue rose 18%, beating analysts' estimates on the top and bottom lines as well as in comparable sales.

Chipotle earned $2.55 a share in the fourth quarter, compared with $1.15 in the year-earlier quarter.

The latest figure reflects a 31-cent charge for expenses related to legal matters, corporate restructuring and certain other items. The latest adjusted earnings were $2.86 a share.

Revenue reached $1.44 billion from $1.23 billion. Comparable restaurant sales advanced 13.4.

Starbucks shares were down 0.36% Wednesday to $87.66. Agilent shares rose 2.07% to $85.25 and Chipotle fell 3% to $857.88.