Bullish Contrarian Play on Starbucks via Options Activity
"Huh, that's very interesting. It's a contrarian play and you have so much negative sentiment on Starbucks right now. Why would this trader do this? And I thought, well, let's look at the risk versus reward. If everyone is negative on the company, where's the max pain to the upside? Because the shorts have to cover and the stock can rally. And I was looking a little bit too at the fundamentals. Remember they just got their new CEO from the burrito stock, CMG. Could he really let the company continue to fall? And I thought, you know, it makes sense of why the stock could bounce and I think that could play a big turnaround in this quarter. So, an actually bullish short term on Starbucks."
The speaker outlines a contrarian trade call on Starbucks based on unusual options activity near its 52-week lows. Noting that a large call order was executed after puts were closed, he argues that the negative sentiment may lead to a short-term bounce as shorts cover their positions and fundamentals improve under new leadership.
Commentary: Starbucks Near-Term Headwinds Amid Turnaround Efforts
"I would guess lower for Starbucks over the next year. They brought in Brian Nickel to fix operations, but it may persist longer than investors want."
The speaker indicates a short-term downside for Starbucks due to ongoing operational challenges, suggesting that the company may struggle in the near term even though long-term fundamentals remain intact.
Bullish Outlook on Starbucks Restructuring
"I don't think contraction was really on people's minds when they brought Brian Nickel in ... And I'm generally a fan of this move as a Starbucks shareholder. ... I'm very optimistic. I predict Starbucks will beat the market over the next five years."
Commentators discuss Starbucks' $1 billion restructuring plan and Brian Nickel's role in trimming underperforming stores. Although the move entails a small contraction in North American stores, the overall sentiment is bullish with expectations that the strategy will help Starbucks return to growth and outperform the market in the coming years.
Starbucks Store Closures Weigh on Share Price
"Well, quite a few things to look at today. Market is lower, of course, but looking at shares of Starbucks, that's ticker SBUX, also lower in trading today, down as much as 1%. The big news of the day here for this company is the fact that it will be closing 1% of its stores in the U.S. and Canada. But, I mean, this is really a big cosmetic change. They're doing a $1 billion restructuring here. ... this is definitely pressuring shares right now as we're kind of digesting the news."
The commentary highlights that Starbucks (SBUX) is closing 1% of its U.S. and Canadian stores as part of a $1 billion restructure aimed at creating a more inviting atmosphere. However, the move is currently pressuring the share price.
Starbucks Bounce Back Ahead of October Earnings
"Starbucks looks like it's finally working through years of problems that have hurt the business. Comps have been negative for seven straight quarters and with Brian Nichol now at the helm, the improvement over the past six months, coming off a brutal 7% drop in last fall's comps, sets Starbucks up to beat expectations when it reports in October."
Jason Hall outlines a bullish thesis for Starbucks. He notes that after years of operational issues and negative comps, management changes and the back-to-Starbucks initiative are beginning to show progress. With low expectations and an upcoming earnings catalyst in October, investors may consider taking a position in Starbucks. (Investors should check ticker SBUX.)