Starbucks/SBUX stock a dead horse?
Hello everyone.
Let's dive right into it.
I speculate that SBUX stock could drop to $74 (see my chart analysis).
Our current economic conditions are similar to those from 2007 to 2009: high unemployment rates, lower wages/consumer staple prices, high credit card charge-offs, an initial 50-point base cut on Fed rates, etc. SBUX stock price was declining linearly during that period.
A new CEO was appointed to turn around the company on January 8, 2008. The stock price initially skyrocketed; however, after about three months, it dropped by about 24% and continued declining. A similar situation occurred a few weeks ago when a new CEO was appointed: the stock price skyrocketed. However, SBUX stock has been declining linearly since 2023, as shown in my chart analysis.
Preliminary earnings for SBUX, published recently, appear poor. Even though the CEO slightly increased the dividend to boost investor sentiment, the PE ratio of around 29 is not attractive. SBUX is nowhere near any of the Magnificent 7 (Meta, Google, NVDA, etc.) companies on the SP500, whose average PE is also around 29. If the new CEO wanted to reassure shareholders who do not have insider information, he should have disclosed the details of insiders who sold or bought shares over the past two months. I would like to ask the new CEO to publicly disclose that information by 8:00 am PST on 10/30/2024.
China's same-store sales, as of today, dropped even more than last quarter's earnings, by about 14%. The boycott against US company product in some countries overseas remains strong.
The company's management misled its investors about performance in China from the end of 2023 to early 2024. Recently, a class action lawsuit was filed by stockholders in the US Federal Court who lost significant money.
Starbucks CEO works from his home office remotely while the company asks remote employees to return to the office
Recently, "Luxury item" stocks have been dropping significantly for obvious reasons, while coffee commodities have risen by almost 66% since 2023 (tradingeconomics.com/commodity/coffee). As a coffee drinker, I am unwilling to pay for a luxury cup of coffee.
I do not intend to offend anyone with my predictions and speculation. Please, be kind to everyone in your comments. I am not here to self promote.
DISCLAIMER: I am not a financial advisor and for the reasons pointed out above I currently hold short positions on SBUX stock. All opinions, news, investigations, analyses, prices, or other information disclosed by me are provided as general remarks and comments for entertainment purposes only. They do not constitute investment advice. I assume no liability for loss or damage, including but not limited to lost profits, that may result directly or indirectly from the use or reliance on the aforementioned opinions, news, investigations, analyses, prices, or other information disclosed by me.
The information provided involves significant financial risk, and I do not recommend anyone to follow my footsteps. The past performance of a security, industry, sector, market, financial product, trading strategy, or individual trade does not guarantee future results or returns. As an investor, you bear full responsibility for your investment decisions by conducting your own research and risk analysis. Such decisions should be based on an assessment of your financial situation, investment objectives, risk tolerance, and liquidity needs.
Let's dive right into it.
I speculate that SBUX stock could drop to $74 (see my chart analysis).
Our current economic conditions are similar to those from 2007 to 2009: high unemployment rates, lower wages/consumer staple prices, high credit card charge-offs, an initial 50-point base cut on Fed rates, etc. SBUX stock price was declining linearly during that period.
A new CEO was appointed to turn around the company on January 8, 2008. The stock price initially skyrocketed; however, after about three months, it dropped by about 24% and continued declining. A similar situation occurred a few weeks ago when a new CEO was appointed: the stock price skyrocketed. However, SBUX stock has been declining linearly since 2023, as shown in my chart analysis.
Preliminary earnings for SBUX, published recently, appear poor. Even though the CEO slightly increased the dividend to boost investor sentiment, the PE ratio of around 29 is not attractive. SBUX is nowhere near any of the Magnificent 7 (Meta, Google, NVDA, etc.) companies on the SP500, whose average PE is also around 29. If the new CEO wanted to reassure shareholders who do not have insider information, he should have disclosed the details of insiders who sold or bought shares over the past two months. I would like to ask the new CEO to publicly disclose that information by 8:00 am PST on 10/30/2024.
China's same-store sales, as of today, dropped even more than last quarter's earnings, by about 14%. The boycott against US company product in some countries overseas remains strong.
The company's management misled its investors about performance in China from the end of 2023 to early 2024. Recently, a class action lawsuit was filed by stockholders in the US Federal Court who lost significant money.
Starbucks CEO works from his home office remotely while the company asks remote employees to return to the office
Recently, "Luxury item" stocks have been dropping significantly for obvious reasons, while coffee commodities have risen by almost 66% since 2023 (tradingeconomics.com/commodity/coffee). As a coffee drinker, I am unwilling to pay for a luxury cup of coffee.
I do not intend to offend anyone with my predictions and speculation. Please, be kind to everyone in your comments. I am not here to self promote.
DISCLAIMER: I am not a financial advisor and for the reasons pointed out above I currently hold short positions on SBUX stock. All opinions, news, investigations, analyses, prices, or other information disclosed by me are provided as general remarks and comments for entertainment purposes only. They do not constitute investment advice. I assume no liability for loss or damage, including but not limited to lost profits, that may result directly or indirectly from the use or reliance on the aforementioned opinions, news, investigations, analyses, prices, or other information disclosed by me.
The information provided involves significant financial risk, and I do not recommend anyone to follow my footsteps. The past performance of a security, industry, sector, market, financial product, trading strategy, or individual trade does not guarantee future results or returns. As an investor, you bear full responsibility for your investment decisions by conducting your own research and risk analysis. Such decisions should be based on an assessment of your financial situation, investment objectives, risk tolerance, and liquidity needs.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.