Investors Purchase Large Volume of Starbucks Call Options (NASDAQ:SBUX)

Key Points

• Investors bought 29,827 Starbucks call options on Monday, about 40% above the typical volume of 21,278.
• Starbucks shares rose 3.8% to $109.37. Its latest quarterly EPS of $0.80 beat estimates, while revenue of $9.14 billion fell short of forecasts and declined 4.5% year over year.
• Analysts’ consensus rating is Hold, with an average price target of $108.83. Starbucks also raised its quarterly dividend from $0.62 to $0.63 per share.

Starbucks Corporation (NASDAQ:SBUX - Get Free Report) was the target of unusually large options trading on Monday. Stock investors purchased 29,827 call options on the company. This represents an increase of approximately 40% compared to the typical volume of 21,278 call options.

Insider Activity at Starbucks

In other news, CEO Brady Brewer sold 2,229 shares of the stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $105.60, for a total transaction of $235,382.40. Following the sale, the chief executive officer directly owned 73,149 shares in the company, valued at approximately $7,724,534.40. This represents a 2.96% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 4,458 shares of company stock worth $449,684 over the last three months. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Starbucks

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Meeder Asset Management Inc. bought a new stake in shares of Starbucks during the second quarter worth $25,000. Black Cypress Capital Management LLC acquired a new position in shares of Starbucks during the second quarter worth $27,000. Center for Financial Planning Inc. lifted its holdings in shares of Starbucks by 125.2% during the third quarter. Center for Financial Planning Inc. now owns 295 shares of the coffee company's stock worth $28,000 after purchasing an additional 164 shares during the period. Financial Freedom LLC bought a new stake in shares of Starbucks in the third quarter worth $30,000. Finally, John Boyer Inc. bought a new stake in shares of Starbucks in the third quarter worth $31,000. Institutional investors and hedge funds own 72.29% of the company's stock.

Analyst Ratings Changes

SBUX has been the topic of a number of analyst reports. Robert W. Baird dropped their price objective on shares of Starbucks from $124.00 to $115.00 and set an "outperform" rating on the stock in a report on Friday, October 2nd. Wells Fargo & Company dropped their price objective on Starbucks from $125.00 to $120.00 and set an "overweight" rating on the stock in a research note on Wednesday, October 21st. Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $126.00 price objective (up from $120.00) on shares of Starbucks in a report on Thursday, July 30th. CICC Research lifted their target price on Starbucks from $95.00 to $110.00 and gave the stock an "outperform" rating in a report on Thursday, August 6th. Finally, Melius Research set a $110.00 target price on Starbucks in a report on Monday, August 3rd. Twenty-one investment analysts have rated the stock with a Buy rating, fifteen have issued a Hold rating and four have given a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Hold" and a consensus target price of $108.83.

Starbucks Stock Up 3.8%

Starbucks stock traded up $3.96 during mid-day trading on Monday, hitting $109.37. The company's stock had a trading volume of 1,953,636 shares, compared to its average volume of 8,149,789. The stock has a market capitalization of $124.69 billion, a P/E ratio of 49.50, a P/E/G ratio of 1.74 and a beta of 1.01. Starbucks has a twelve month low of $81.97 and a twelve month high of $111.50. The stock's fifty day moving average price is $99.15 and its two-hundred day moving average price is $100.05.

Starbucks (NASDAQ:SBUX - Get Free Report) last released its quarterly earnings data on Thursday, October 29th. The coffee company reported $0.80 earnings per share for the quarter, topping the consensus estimate of $0.72 by $0.08. The business had revenue of $9.14 billion during the quarter, compared to analyst estimates of $9.22 billion. Starbucks had a negative return on equity of 38.61% and a net margin of 6.66%. The company's revenue was down 4.5% compared to the same quarter last year. During the same period last year, the company posted $0.52 EPS. Equities analysts expect that Starbucks will post 3.22 earnings per share for the current year.

Starbucks Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, November 27th. Stockholders of record on Friday, November 13th will be issued a dividend of $0.63 per share. This is an increase from Starbucks's previous quarterly dividend of $0.62. This represents a $2.52 dividend on an annualized basis and a dividend yield of 2.3%. The ex-dividend date is Friday, November 13th. Starbucks's dividend payout ratio (DPR) is presently 114.03%.

Starbucks Company Profile

Starbucks Corporation is a global coffee company that roasts, markets and sells coffee and other beverages, along with food and related merchandise. Its offerings include brewed coffee, espresso-based drinks, teas and packaged coffee products.

The company serves customers through company-operated and licensed stores, as well as through retail and food-service partnerships. Its stores also sell items such as mugs and coffee-making equipment.

Founded in Seattle in 1971, Starbucks operates in North America and international markets, including China.

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