Starbucks: Where You Want It


How long is Starbucks (SBUX) going to consolidate sideways before it finally breaks free? It has been nearly two years since we’ve seen Starbucks stock trade outside of the range of $52 to $62 per share.

Finally in late May to early June, we saw Starbucks stock breakout above $62 and nearly hit $65 per share. The excitement was short lived though, and Starbucks pulled back within the range that its shareholders are too familiar with.

Starbucks’ breakout above $64 was related to rumors that comparative same store sales were strong and that the company had made necessary changes to improve customer throughput. However, the June pullback began after there were whispers that Starbucks comp sales were going to be more in the neighborhood of 3% when analysts would like to see 3.6 to even 4%.

In order for Starbucks stock to break this range that has frustrated its shareholders, it must report positive data on comp sales when the company has its Q3 earnings call. CEO, Kevin Johnson said that for Starbucks 2017 would be a tail of two halves. He stated, “With our US business accelerating throughout the quarter and strong performance in China, we are poised to deliver strong revenue growth in the second half and into the future.” If Johnson’s bullish rhetoric bears weight and comes to be Starbucks stock has some room to run.


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