Starbucks, JetBlue, Whirlpool Downgraded

Analysts downwardly revised their ratings and price targets on coffee chain Starbucks Corporation (SBUX), airline JetBlue Airways Corporation (JBLU), and home appliance stock Whirlpool Corporation (WHR)

Jan 27, 2017 at 11:09 AM
facebook twitter linkedin

Analysts are weighing in on coffee chain Starbucks Corporation (NASDAQ:SBUX), airline JetBlue Airways Corporation (NASDAQ:JBLU), and home appliance stock Whirlpool Corporation (NYSE:WHR). Here's a quick roundup of today's bearish brokerage notes on SBUX, JBLU, and WHR.

Starbucks Sinks On Price-Target Cuts

SBUX is down 4.2% at $56.00, after the coffee company delivered disappointing quarterly sales last night and trimmed its full-year forecast, citing difficulties caused by the rapid expansion of its mobile ordering technology. In addition, Barclays, J.P. Morgan Securities, and Buckingham Research cut their price targets to $61, $58, and $54, respectively. The latter explained that it is "undeniable that business is slowing," and predicted "valuation contraction continuing." SBUX shares are now down 5.5% year-over-year, and are testing support at their 200-day moving average -- a trendline that acted as resistance on several occasions in 2016. Put players are likely cheering today's drop, with SBUX's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 2.00 sitting at an annual peak.

JetBlue Walloped by Weak Earnings Report

JBLU is down 4.1% at $20.25, after a mixed earnings report that included a weak forecast for its January passenger revenue per available seat mile (PRASM) ratio. The airline was also hit with a trio of price-target cuts from Deutsche Bank, Citigroup, and Imperial Capital, to $28, $21, and $29, respectively. JBLU is now down 12.5% from its 2017 peak. In the option pits, though, JBLU traders have been betting on upside, with its 50-day call/put volume ratio of 13.92 at the ISE, CBOE, and PHLX sitting higher than 94% of all other readings from the past year. An unwinding of these bullish bets could create significant headwinds for the airline stock.

Whirlpool Removed From "Americas Buy" List

WHR is down 1.5% at $171.30, after yesterday's mixed earnings report was met with bearish analyst attention. Specifically, Goldman Sachs removed the stock from its "Americas Buy" list, and also downgraded the shares to "neutral" from "buy," while cutting its price target to $187 from $191. The shares are still up more than 17% from their near-term bottom in late October, and roughly 30% year-over-year. Near-term traders have been unusually call-skewed toward the stock, with WHR's Schaeffer's put/call open interest ratio (SOIR) of 0.76 sitting just 1 percentage point from an annual low.

Find out where the Dow lands right after the closing bell. Sign up now for Schaeffer's Market Recap

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners