Chipotle Mexican Grill, Yahoo, Macy’s Top 3 CEOs On the Hot Seat For 2016

2016 represents a new beginning for many businesses, but last year’s disappointments could soon catch up with several prominent CEOs.

In fact, numerous businesses could make significant leadership changes this year, including:

1. Yahoo (YHOO)

Yahoo CEO Marissa Mayer has been at the company’s helm since July 2012. But she could be on her way out after Yahoo called off its spin-off of Chinese e-commerce provider Alibaba (BABA) last month due to tax concerns.

Activist investor Starboard Value in November requested Yahoo cancel its Alibaba spin-off and sell its holdings. And now, Yahoo will look to keep Alibaba and spin off its other assets, which could lead Mayer out the door.

When it comes to Yahoo shares, it may be best to take a wait-and-see approach. Yahoo’s per-share price went as high as $50.23 and as low as $27.60 last year. And with Yahoo’s share-price fluctuations, it likely is a good idea to see how the company handles Alibaba and its other assets before buying or selling.

2. Chipotle Mexican Grill (CMG)

Remember when Chipotle closed 3Q15 with a 12.2% year-over-year revenue increase? The future once looked bright for this restaurant chain, at least until the company opened an investigation into E.coli cases at 11 of its restaurants in Washington and Oregon. But now, the future looks dicey at best for Chipotle co-CEOs Steve Ells and Montgomery Moran.

Chipotle continues to work with the Centers for Disease Control and Prevention (CDC) and Food and Drug Administration (FDA) regarding the E.coli cases (as well as a norovirus incident reported at one of its Boston locations last month). The restaurant chain has even taken steps to become “an industry leader in food safety.” However, it may be too little, too late for Ells and Moran at this point.

Fortunately, some are using this as a tie to invest in Chipotle, regardless of whether the company makes leadership changes. Chipotle’s per-share price has plummeted over the past few months, and those who purchase shares at bargain prices now could reap the benefits of a strong rebound in the near future. However, that rebound is likely several quarters off, and if it comes, I’m not sure how powerful it’ll be given the fact that Chipotle will likely not enjoy the premium multiples it’s had in the past.

3. Macy’s (M)

Macy’s CEO Terry Lundgren has already rejected activist investors’ suggestion to spin off its stores into a real estate investment trust, despite the company’s declining sales. And with a per-share price that shows no sounds of rebounding anytime soon, Lundgren could be in the crosshairs.

Today’s always-on, always-connected consumers are shying away from retailers like Macy’s. Meanwhile, Macy’s has not shown it can adapt to a rapidly changing mobile marketplace, which puts its shareholders at risk.

Macy’s shareholders should consider selling now. Although Macy’s remains the largest department store in the United States, the retailer appears to have fallen behind in a rapidly evolving digital marketplace. And by the time Macy’s catches up to its rivals, it may be too late for the company and its shareholders.

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Chipotle Mexican Grill CMG
Chart via S&P Capital IQ