Price Forecast:

Bullish Case: Increased consumer loyalty driven by Starbucks' sustainability efforts may lead to higher sales, supported by a favorable seasonal boost from holiday offerings, potentially driving stock prices up.

Bearish Case: Ongoing union disputes could lead to operational challenges, along with competitive pressures in key markets like China, negatively impacting sales and investor sentiment.

Potential Outcomes:

1. 60% probability: Strong seasonal sales participation boosts revenues.
2. 50% probability: Unstable conditions from labor disputes limit profitability.
3. 40% probability: Continued competitive pressure from local coffee brands in China affects growth.

Trading Oracle: Implement a bullish debit spread by buying the SBUX $100 call and selling the $102 call, capitalizing on seasonal strengths. Given strong implied volatility from upcoming events, this strategy taps into positive market sentiment with favorable odds (89%) and a target return of 15%.

December 01, 2024