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Starbucks (SBUX) stock is facing a difficult market outlook with weak technical signals holding back a generally brighter fundamentals picture. Despite the negative trend that caused another share price drop of 1.26% recently, the long-term health of the coffee giant seems optimistic based on its strong fundamentals.
Overall, Starbucks shares possess a moderately weak score of 1.89 from a technical perspective, which suggests that at least some portion of the shares are bullish. Starbucks' stock has two bearish signals, indicating that the technical structure is leaning bearish. The two important bearish indicators include WR Oversold and Dividend Payable Date, which indicate the risk of a new lower price in the near future.
Starbucks share price chart on TradingView shows gains of 1.80% in pre-market trading, giving investors some hope of recovery:
There is a notable split between institutional players and retail players. Institutional players act cautiously, as rated by the block inflow ratio of 47.54% in total participant measures, respectively, with these order inflows, while Retail participants clearly have a bullish view since the small inflow ratios total approximately 50.08%. The difference in sentiment reveals that smaller money managers are taking profits or reducing risk while individual retail investor participation remains strong.
Starbucks stock finds itself in ebbs and flows concerning broader economic, political, and other factors that could indirectly impact its operations. There is a possibility of tariffs being placed on suppliers such as Canada, Mexico, and China by the Trump administration. This can potentially increase their costs and squeeze already slim margins.
Conversely, if the hospitality and travel industry were to be in recovery, evidenced by worldwide expansion from InterContinental Hotels, which would also tangentially benefit Starbucks international locations.
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The viewpoint of analysts is moderately positive, according to an AInvest report. With a simple average leaning to 3.62 with a mix of ‘Buy’ (8) and ‘Neutral’ (5). However, this optimistic outlook is in conflict with the stock price downtrend. Given the predominance of a bearish technical outlook, it would be prudent for any investors to allow for a pullback. Analysts advise taking time to form a new and open investment position before trading well into the next quarter. In any case, the dip in short-term momentum will form an opportunity in the immediate few weeks.
