Starbucks Stock Sees Fresh Coverage Amid Corporate Moves

The news attracted fresh coverage from Guggenheim

Digital Content Manager
Jul 27, 2021 at 10:05 AM
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Coffee chain Starbucks Corporation (NASDAQ:SBUX) is making big moves this week. The company yesterday announced that it will leave its $2 billion joint venture in South Korea and sell the stakes to local partner E-Mart, as well as Singapore sovereign wealth fund GIC, as it looks to invest in fast-growing international markets. Plus, it said it is extending its partnership with Nestle to launch ready-to-drink coffee drinks across Southeast Asia, Oceania, and Latin America. At last check, SBUX is down 0.2% to trade at $125.77.

The news caught the attention of Guggenheim, which initiated coverage of the security with a "neutral" rating, and a $125 price target. Analysts were bullish towards the equity coming into today, with 14 of the 19 in question calling it a "buy" or better, while five said "hold." 

Starbucks stock has been carving out a channel of higher highs over the past 12 months, with support from the 100-day moving average, which helped contain its June pullback to the $109 level. The security also just reached a July 23, all-time high of $126.32, and boasts a 64.8% year-over-year lead.

The options pits reflect that optimism, with calls popular. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SBUX sports a 50-day call/put volume ratio of 2.96, which stands higher than 83% of readings from the last year. In other words, long calls are being picked up at a faster-than-usual pace.

 

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