Your favourite cup of joe stock has been left without any cream this year, as geopolitical tensions weigh in on the global economy, which has seen the Starbucks Corporation (SBUX) down 27% YTD.
We might expect even lower opportunities on our favourite coffee share as the recent company events take shape over the short term.
What’s The Deal with Starbucks?
- The latest news on SBUX might be good for the employees and business as Howard Schultz returns for the third time as CEO. Schultz announced that SBUX will pause its stock buyback program and channel that investment to its staff and its business.
- Some analysts have dropped their short-term recommendations on Starbucks as the buyback suspension could impact the company’s earnings by 3% over fiscal 2023.
- Luckily its not all doom and gloom as we feel the global coffee brand still holds upside potential and the recent announcements should not spook investors. The nearly $20 billion planned for buybacks in 2022 can now be channelled to investment that actually grow the fundamentals.
Technically Speaking
- As seen on the chart, we might target lower levels on SBUX if negative investor sentiment continues and inflationary headwinds persist.
- Upside potential from current levels is around the $94.81
- Worst case scenario in the short term could be lower levels at the $69.07 which would boast well for long term investors looking to get more stocks at a “cheaper” price.
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Sources: EasyResearch, Starbucks Corporation, Reuters, Koyfin.
Barry Dumas | Head Of EasyResearch at EasyEquities
Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
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