Starbucks Stock Brushes Off Barrage of Post-Earnings Bear Notes

No less than 12 analysts slashed their price targets

Digital Content Manager
May 4, 2022 at 9:41 AM
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The shares of Starbucks Corporation (NASDAQ:SBUX) are up 7% to trade at $79.50 this morning, following the company's fiscal second-quarter earnings report. The coffee company posted profits of 59 cents per share, which fell in line with expectations, while its revenues of $7.64 billion topped analysts' estimates.

Starbucks did decide to suspend its full-year guidance, noting the strict Covid-19 measures in China led to quarterly sales falling 23% in the region, resulting in sales that missed expectations. Starbuck's CEO also announced that the company will raise wages for tenured employees and double down on training in an effort to curb many locations' push to unionize. 

Analysts aren't convinced by Starbucks stock's post-earnings pop, and so far no less than 12 brokerages have lowered their price objectives. The lowest came from Citigroup to $76. Heading into today, analysts were split on the equity, with 12 saying "strong buy," and 13 saying "hold." Meanwhile, the 12-month consensus price target of $99.07 is a 33.3% premium to last night's close. 

Its been a tough 2022 so far for SBUX, which is down 36.5% in that time span and hit a roughly two-year low of $73.38 during yesterday's session. Today's pop has SBUX ready to climb back above its 20-day moving average for the first time since a brief pop in early April. 

An unwinding of bearishness among options traders could lift SBUX even higher off these lows. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 10-day put/call volume ratio of 0.80, which sits higher than 95% of readings from the past year. This implies that while calls are still outnumbering puts on an overall basis, there's been a healthier-than-usual penchant for bearish bets of late. 

 

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