Short Trade Idea
Enter your short position between $85.05 (yesterday’s intra-day low) and $86.79 (the lower band of its horizontal resistance zone).
Market Index Analysis
- Starbucks (SBUX) is a member of the NASDAQ 100, the S&P 100, and the S&P 500.
- All three indices trade inside bearish chart patterns with rising bearish volumes.
- The Bull Bear Power Indicator on the S&P 500 Index is bullish with a negative divergence.
Market Sentiment Analysis
Equity markets extended their year-end slide with rising bearish trading volumes, and equity futures are pointing to another sell-off this morning. Minutes from the last FOMC meeting revealed a tight decision to cut interest rates, while the Dot Plot Chart shows just one interest rate cut in 2026 and one in 2027. Tesla issued a downbeat outlook, while warnings about the circular financing trap in AI, led by NVIDIA, added to bearish sentiment. Today’s session is likely to extend this week’s downtrend amid a lack of catalysts in either direction.
Starbucks Fundamental Analysis
Starbucks is the world’s largest coffeehouse chain. Many credit it with launching the second wave of the global coffee culture. The company serves customers in 80 countries from over 35,700 stores.
So, why am I bearish on SBUX after its recent decline?
While management tries its best to win the labor unionization effort, it diverts necessary resources from growth initiatives. I appreciate Starbucks’ plan to explore cryptocurrency payments, but I remain bearish on its declining same-store sales internationally, projected profit contractions in the current quarter, and rising competition from Chinese coffee houses and tea chains. The uncertain outlook over its urban pullback and store closures amid saturation concerns adds to my bearish narrative.
Metric | Value | Verdict |
P/E Ratio | 52.30 | Bearish |
P/B Ratio | Unavailable | Bearish |
PEG Ratio | 2.74 | Bearish |
Current Ratio | 0.72 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earning (P/E) ratio of 52.30 makes SBUX an expensive stock. By comparison, the P/E ratio for the S&P 500 is 29.46.
Top Regulated Brokers
The average analyst price target for SBUX is $94.13, suggesting limited upside potential with expanding downside risks.
Starbucks Technical Analysis
Today’s SBUX Signal
- The SBUX D1 chart shows the price action breaking down below its horizontal resistance zone.
- It also shows price action between its descending 50.0% and 61.8% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator turned bearish with a descending trendline.
- The average bearish trading volumes are higher than the average bullish trading volumes.
- SBUX recently corrected as the S&P 500 advanced, a bearish confirmation.
My SBUX Short Stock Trading Signal
- SBUX Entry Level: Between $85.05 and $86.79
- SBUX Take Profit: Between $67.97 and $71.55
- SBUX Stop Loss: Between $92.21 and $94.85
- Risk/Reward Ratio: 2.39
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