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Options Bulls, Analysts Eye SBUX Despite Revenue Miss

Year-over-year, SBUX is up over 42%

Digital Content Manager
Apr 28, 2021 at 10:42 AM
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The shares of Starbucks Corporation (NASDAQ:SBUX) are down 3.7% at $111.81 at last check, despite the company reporting better-than-expected second-quarter earnings of 62 cents per share. Instead, what could be weighing down shares is a revenue miss, after the coffee chain's international sales dipped, though U.S. sales are now back to pre-pandemic levels. In turn, the coffee chain upped its annual profit and revenue forecasts, in anticipation consumers will return as vaccination levels ramp up.

The brokerage bunch is responding to the news with optimism. The security earned no fewer than 10 price-target hikes this morning, including one from Jefferies to $135 from $118. Analysts are already bullish on SBUX, with 14 of the 21 in coverage calling it a "buy" or better, while seven say "hold."

On the charts, the equity is fresh off an April 19, all-time high of $118.98. The supportive 40-day moving average, which coincides with the $112 level, seems like it could contain today's negative price action. Longer term, Starbucks stock still sports a 42.8% year-over-year lead.

The options pits are optimistic as well, with an appetite for calls. This is per SBUX's 50-day call/put volume ratio of 2.87 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 80th percentile of the past 12 months. In other words, long calls are being picked up at a quicker-than-usual pace.

Drilling down to today's options activity, 46,000 calls and 18,000 puts have crossed the tape so far, which is five times what's typically seen at this point. Most popular is the monthly June 115 call, followed by the weekly 4/30 120-strike call, the latter of which expires at the end of the week.

 

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