Starbucks Shares Slip on Schultz Retirement Announcement

SBUX options are attractively priced for short-term traders at the moment

Managing Editor
Jun 5, 2018 at 10:03 AM
facebook X logo linkedin


Coffee stock Starbucks Corporation (NASDAQ:SBUX) is lower in early trading, after the company's former CEO and co-founder Howard Schultz announced that he will retire from the executive chairman role on June 26 -- the anniversary of taking SBUX public in 1992. As part of his next chapter, Schultz stated that he hopes to take part "in giving back" through philanthropy and public service -- sparking speculation as to whether or not that includes a run for president. In response, SBUX stock is down 3% at $55.37, at last check. 

Starbucks stock has been in a channel of lower highs since mid-April, with the $56-$56.50 area acting as a floor of support. Today, however, SBUX is poised for its lowest close since February, and is back below its 200-day moving average and year-to-date breakeven.

Regardless of the stock's recent price action, analyst sentiment remains mostly bullish. Of the 25 firms covering SBUX, 16 currently hold "buy" or "strong buy" recommendations. Further, the stock's average 12-month price target stands at $63.88 -- now a 15.4% premium to current levels. A round of post-Schultz downgrades and/or price-targets could further weigh on SBUX.

With that in mind, traders looking to speculate on the equity's short-term price action may want to do so with options, which are attractively priced at the moment. SBUX currently sports a Schaeffer's Volatility Index (SVI) of 15%, which ranks in the 14th percentile of its annual range. This suggests that near-term options are pricing in relatively low volatility expectations at the moment, which could help maximize the benefit of leverage for premium buyers.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI