Earnings results last night has ushered in upgrades from Wedbush, who lifted its (SBUX) target from $75 to $81/sh on Wednesday morning. Morgan Stanley lifted their target to $79 from $75 while keeping an equal weight. The buzz on the street was (SBUX) “digital initiatives” are unlocking further momentum.
We saw (SBUX) option flow, sweepers, and block size trades a week ago.
For those of you that took the initiative, congratulations. Now we need to take some profits off as volatility crush will kill IV% premium within the first hour. Sell some or all of your call options at the open. We wouldn’t consider additional options trades until IV% eases back below 30% (+/-).
Going forward, Starbuck’s (SBUX) results for the quarter are noted. Better than most expected, all things considered.
“Starbucks (SBUX) reported a 3rd Quarter June 2020 loss of $0.46 per share on revenue of $4.2 billion. The consensus estimate was a loss of $0.61 per share on revenue of $4.3 billion. The Earnings Whisper number was for a loss of $0.54 per share. Revenue fell 38.1% compared to the same quarter a year ago.”
“The company said it expects fourth-quarter earnings of $0.18 to $0.33 per share. The current consensus earnings estimate is $0.27 per share for the quarter ending September 30, 2020.” Courtesy Earningswhispers.com
Going forward, we’ll watch how price reacts to the 200d overhead. If Starbucks can breach that level look for consolidation. We’d consider a position for a longer-term swing if it can move above 79 – 80 (+/-) per share.
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