Price Forecast:

Bullish Case: PLAY may surge as consumer spending rebounds, driven by nostalgia and strong marketing, alongside recent social media optimism, potentially lifting revenues during the holiday season.

Bearish Case: Economic pressures and high debt levels could suppress PLAY's performance, with consumer discretionary spending tightening, risking further downside as rising operating costs threaten profit margins.

Potential Outcomes:

• 20%: Strong holiday demand results in earnings beat.
• 30%: Continued economic weakness leads to further stock decline.
• 25%: Sideways movement due to mixed market sentiment.
• 25%: Strategic expansion mitigates downturn, stabilizing prices.

Trading Oracle: Given the high implied volatility close to earnings on December 20, consider a bullish debit spread by buying $28 calls and selling $30 calls. This captures upside if results exceed expectations while limiting downside risk. Targeting execution by year-end aligns with expected positive market movements.

December 20, 2024