DailyPlay – Opening Trade (SBUX) – September 04, 2025

SBUX Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
Starbucks Corporation (SBUX) remains under pressure as both technical and fundamental signals align to suggest limited upside in the near term. The stock has been unable to sustain momentum, with price action rolling over while valuation continues to screen rich against industry peers. Given weaker earnings growth expectations and operational headwinds, a defined-risk bearish options strategy is appropriate to capture potential downside while managing exposure.

Technical Analysis
Price action in SBUX has deteriorated, with shares slipping back below the 20- and 50-day moving averages, and momentum indicators pointing lower. The 200-day moving average around $95 remains a ceiling, and near-term rallies have been capped by declining trend resistance. Notably, inside the options play platform yesterday a “CCI Rally in Bearish Trend” alert was generated, highlighting that while the stock is currently in a bearish trend, it has recently experienced a short-term price rally that may provide an opportunity for a bearish trade setup. With relative strength readings subdued and volume confirming weakness, the technical backdrop supports a defensive view.

Fundamental Analysis
Starbucks is modestly overvalued compared to peers and continues to underperform across key profitability and growth metrics. The combination of slower EPS growth, margin compression, and higher valuation multiples reinforces downside risks:

• Forward PE Ratio:  32.57x vs. Industry Median 26.64x
  
• Expected EPS Growth:  0% vs. Industry Median 9.18%
  
• Expected Revenue Growth:  5.55% vs. Industry Median 6.56%
  
• Net Margins:  7.18% vs. Industry Median 12.49%
  

Options Trade
A defined-risk bearish stance can be expressed with the Oct 17, 2025 $90/$95 bear call vertical spread, which brings in a net credit of $1.41. The setup offers a maximum reward of $141 versus a maximum risk of $359, giving a reward-to-risk ratio of about 1:2.5. The trade works best if SBUX stays below $90, where the 20-day moving average has been acting as short-term overhead resistance, while the spread structure caps losses in the event of a breakout.

SBUX – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 5 SBUX Oct 17 $90/$95 Call Vertical Spreads @ $1.41 Credit per Contract.

Total Risk: This trade has a max risk of $1,795 (5 Contracts x $359) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $359 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 95

Stop Loss: @ $2.82 (100% loss to value of premium)

View SBUX Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View SBUX Trade