Starbucks Stock Upgraded on U.S. Momentum

Analysts are betting on continued growth from SBUX's coffee segment

Digital Content Manager
Oct 11, 2021 at 9:37 AM
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The shares of Starbucks Corporation (NASDAQ:SBUX) are up 1.3% at $112.71 this morning, after the coffee chain received an upgrade from Deutsche Bank to "buy" from "hold." The analyst in question noted the company's "incredible" momentum in the U.S., as well as its prospects of continued unit growth in China. Meanwhile, Bank of America reinstated its "buy" rating and $135 price target, citing continued growth in the specialty coffee segment. 

What's notable about this analyst attention is that the brokerage bunch was firmly bullish towards the stock coming into today. Of the 22 analysts in coverage, 14 carried a "buy" or better rating, while eight said "hold." Plus, SBUX's 12-month consensus target price of $130.22 is a 17.1% premium to the stock's last close.

Starbucks stock has taken a breather since its July 23 record high of $126.32, consolidating around its 200-day moving average for the past few weeks. Today's positive price action should help SBUX distance itself from its year-to-date breakeven level and build on its healthy 24.2% 12-month lead.  

The options pits have seen an uptick in put buying lately. This is per the equity's 10-day put/call volume ratio of 1.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all readings in its annual range, indicating puts are getting picked up at a faster-than-usual pace in the last two weeks. Should some of this pessimism start to unwind, shares could surge even higher.


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