SBUX Should I Buy
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Buy now for a tactical entry. SBUX is sitting directly on first support ($91.48) after a -2.1% pullback with short-term RSI near oversold, while the broader trend remains bullish (SMA_5 > SMA_20 > SMA_200). Options positioning is net-bullish (put/call ratios < 1), and the post–Investor Day analyst target raises provide a near-term sentiment tailwind. The main risk is that the latest quarter showed sharp profit/margin compression, so this is a “buy-the-dip for rebound/continuation” call rather than a clean fundamentals-driven entry.
Trend is still constructive on a multi-timeframe basis because moving averages are stacked bullish (SMA_5 > SMA_20 > SMA_200), implying an established uptrend. However, momentum has weakened short term: MACD histogram is negative (-0.177) and expanding, signaling the selloff is still pressuring price. RSI_6 at ~34 is near oversold, which often supports a bounce attempt, especially as price is exactly at S1 support ($91.48). Key levels: Support S1=$91.48 (being tested now), S2=$88.17 (next downside level). Resistance/Pivot at $96.84 is the first reclaim level; then R1=$102.21. Practical read: short-term dip inside a larger uptrend, with a favorable “support + near-oversold” setup for an impatient buyer.
Investor Day messaging: reaffirmed longer-term targets (FY28: 5%+ net revenue growth, 3%+ comp growth) and operational turnaround narrative (“Back to Starbucks”).
Expansion plans: up to ~5,000 new U.S. coffeehouses plus international expansion supports long-run unit growth.
Analyst target raises across multiple firms (Barclays, Deutsche Bank, Wells Fargo, BofA, Piper Sandler, UBS, etc.) reinforce improving Street confidence.
Retail sentiment described as “extremely bullish,” which can support near-term dip-buying behavior.
Profitability deterioration in the latest quarter: large YoY drops in net income/EPS and gross margin pressure undermine the fundamental quality of the rally until margins stabilize.
Governance/legal overhang: headline risk from investigations into executives for potential fiduciary breaches (can weigh on sentiment even if not financially material).
Industry headwinds: consumer shift toward convenience-store prepared foods and heightened price sensitivity + aggressive pricing in fast-casual could cap traffic and pricing power.
Congress activity is skewed to selling (0 buys, 4 sells in last 90 days), a negative sentiment signal from influential participants.
Latest quarter: 2026/Q1. Revenue grew to $9.915B (+5.50% YoY), showing top-line momentum. However, profitability weakened sharply: Net Income fell to $293.3M (-62.44% YoY) and EPS dropped to $0.26 (-62.32% YoY). Gross margin declined to 17.03% (-15.48% YoY). Bottom line: sales are growing, but the turnaround is currently costing margin/profit—this is the key fundamental “con” versus the otherwise improving narrative.
Recent trend is clearly improving: multiple firms raised price targets into/after earnings and Investor Day while largely maintaining their stances (Overweight/Buy ratings reiterated by Barclays, Deutsche Bank, Wells Fargo, BofA, Piper Sandler; several Neutrals/Holds remain like UBS, Guggenheim, Mizuho, TD Cowen). Wall Street pros: improving comps/turnaround visibility, credible FY28 algorithm, and a stronger multi-year growth narrative. Wall Street cons: valuation debate (mentions of peak/lofty forward multiple) and the need for clearer proof of sustained sales recovery plus margin expansion to justify more upside from current levels.
Intellectia Proprietary Trading Signals
Influential/Political trading check (Congress): In the last 90 days, Congress recorded 4 trades: 0 buys and 4 sells (median ~$0.8M), which is a bearish/cautious external sentiment input.
