Starbucks Stock Could Stall Out Says Deutsche Bank

The stock has yet to reclaim its year-to-date or year-over-year breakeven levels

Digital Content Manager
Dec 5, 2022 at 9:43 AM
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Starbucks Corporation (NASDAQ:SBUX) has been in the news a lot lately. The coffee chain has seen employees strike at dozens of stores in the U.S., it recently closed its Seattle location that was the first to unionize, and now the firm has come under pressure after rolling out what many are deeming a clunky tipping system. Amid the deluge of headlines, Deutsche Bank has chimed in with a downgrade, lowering its rating to "hold" from "buy," noting that it foresees little to no near-term upside for the stock now that it sits above the $100 level. The analyst did, however, raise its price target by $6 to $106. 

Shares of Starbucks are sinking in response, last seen down 1.4% at $103.58. As we mentioned before, the stock broke out above the $100 mark after a brief consolidation last Wednesday, locking in an 18% gain for November, which marks the stock's biggest monthly jump since 2009. Last Friday, SBUX was trading at its highest level since January 2022, though it hasn't managed to reclaim it's year-to-date or year-over-year breakeven levels. 

Coming into today, there was already some hesitancy among the brokerage bunch. Of the 24 in coverage, 13 called the stock a "hold." Meanwhile, short sellers are starting to jump on the bearish bandwagon, with short interest rising 15.6% in the last reporting period. 

Options players, meanwhile, are showing a heavier-than-usual a preference for puts. While call volume still outpaces put volume on an overall basis, the stock's 50-day put/call volume ratio sits higher than 84% of readings at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

 

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