STARBUCKS CORP.: THE GOLDMAN SACHS GROUP INC. ANALYSTS REITERATE A BUY RATING
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 99.55 |
| Take Profit | 104.00 |
| Stop Loss | 98.00 |
| Key Levels | 91.00, 97.50, 99.50, 104.00 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 97.45 |
| Take Profit | 91.00 |
| Stop Loss | 99.00 |
| Key Levels | 91.00, 97.50, 99.50, 104.00 |
Current trend
Shares of Starbucks Corp., one of the largest companies that owns the coffee chain of the same name, are trading at 98.55, up more than 20.0% after announcing changes in top management.
New CEO Brian Niccol replaces Lakshman Narasimhan, whose reign was remembered by investors for poor financial performance. Namely, same-store sales fell 0.6% YoY, and the Q3 operating income fell 5.1% to 1.5B dollars. Niccol said he would initially focus on improving service in US coffee shops before turning his attention to his second-largest market, China, which has struggled to recover from the COVID–19 pandemic. Due to increased competition from Luckin Coffee Inc., management has repeatedly increased the volume of discounts and promotions to attract customers. The company also faces long lead times, falling demand, labor union negotiations, and pressure from activist investors. The company has been boycotted over its perceived stance on the confrontation between Israel and the Palestinian movement Hamas. Now, Starbucks Corp. is looking to improve operational efficiency, especially during busy morning hours, by ensuring on-time delivery and planning to improve the atmosphere in coffee shops significantly by distinguishing between customers who receive services in stores and those who stay at home.
Against this background, analysts predict an increase in operating indicators. Thus, experts from The Goldman Sachs Group Inc. confirmed the buy rating, keeping the target price at 100.0 dollars per share.
Support and resistance
On the daily chart, the trading instrument is moving in a corrective uptrend after the completion of the price gap of 91.00–75.50.
Technical indicators strengthen the buy signal: the EMA oscillation range on the Alligator indicator is expanding upwards, and the AO histogram is forming ascending bars in the buy zone.
Resistance levels: 99.50, 104.00.
Support levels: 97.50, 91.00.
Trading tips
Long positions may be opened after the price rises and consolidates above the 99.50 level, with the target at 104.00. Stop loss – 98.00. Implementation period: 7 days or more.
Short positions may be opened after the price falls and consolidates below the 97.50 level, with the target at 91.00. Stop loss – 99.00.
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