Baird downgraded SBUX to "neutral" and lowered its price target to $85
Starbucks Corporation (NASDAQ:SBUX) stock was last seen 4.4% lower to trade at $78.50, after Baird downgraded it to “neutral” from “outperform” and cut its price target to $85 from $114. The analyst in coverage cited near-term earnings uncertainty, noting that the coffee giant may struggle to hit consensus projections that depend on a same-store traffic recovery -- a trend that has recently shown signs of softening.
This bear note seems overdue. SBUX sports a 14.1% year-to-date deficit and fell 11.4% over the past 12 months. The stock is coming off its fifth losing week in six and is on track for a roughly 22% three-day skid, though the $76 region could stop today's steep losses.
Analysts were bullish coming into today. Of the 32 brokerages covering SBUX, 19 maintain a “buy" or better rating, leaving ample room for downgrades. Options traders, however, are already on the defensive. This is per Starbucks stock's 50-day put/call volume ratio of 1.05 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 83rd percentile of annual readings.
Drilling down to today's options activity, 10,000 calls have crossed the tape, which is double the intraday average volume. Most active contract is the weekly 4/17 106-strike call, where new positions are being sold to open.