Our technical analysis affiliate, Adam Hewison of INO, has an audio-video chart analysis calling for performance problems in Starbucks’ shares. It may be hard to endorse his lower-end target that is based solely on technicals because that was down almost at $15.00. The first real target if the market does not strengthen handily was $20.00.
JPMorgan maintained an “overweight” rating but took the target to $29.00 from $30.00. Piper Jaffray maintained an “Overweight” rating but lifted its target to $3.002 from $30.00. Analysts just did not make any huge calls here after earnings, another signal that the turnaround has turned. Thomson Reuters has an average price target of roughly $29.60.
Shares are currently around $25.05, which is less than 1% different than when its earnings were released. So far this is just a tug-of-war between bulls and bears.
The stock is nestled between its 50-day moving average (%25.97 today) and the 200-day moving average ($23.78 today). Until the shares get closer to either price and perhaps until those averages converge, this one looks like it is in a technical no-man’s land.
Unless something new and unknown happens, this issue feels fully valued. Shorting solely on valuations is often just as much guess-work as shorting based solely on a chart pattern. Unfortunately for Starbucks holders, the same is true for buying.
JON C. OGG
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