Starbucks heads into June with shorts rebuilding sharply and the stock handing back most of its post-earnings gains — the clearest sign yet that the market remains unconvinced the turnaround is tracking.
The short interest story is the dominant feature this week. Short interest climbed to 4.35% of the free float by June 2, a 23% jump in a single week and the highest reading in the 30-day window, having troughed around 3.4% just a week prior. That's a meaningful rebuild: from late May's relative calm, roughly 10 million additional shares have been added to the short book in less than two weeks. The catalyst appears to be the stock's failure to hold the ground gained after Q2 earnings on April 28. SBUX closed at $95.51 on June 2, down nearly 6% on the week and almost 10% over the past month — erasing the bulk of the 7.8% single-day surge that followed the earnings beat. The ORTEX short score has drifted higher in tandem, reaching 43.7 from 39.8 just over a week ago. That's still a moderate reading, not an extreme, but the direction of travel is firm.
The borrow market tells a much calmer story. Availability is exceptionally loose — currently running at nearly 20 times the outstanding short interest, well above the 52-week trough of roughly 7.5x. Cost to borrow is a nominal 0.48%, up modestly over the past month but still in "easy borrow" territory. There is no squeeze pressure here. New shorts can establish positions with virtually no friction, which may partly explain why they have. Options positioning is similarly measured: the put/call ratio of 0.91 is just marginally above its 20-day average of 0.89, and nowhere near the 52-week high of 0.98 touched in mid-May. Options traders are not running for the exits.
The Street is broadly constructive but selectively so. Most analysts raised targets after the Q2 earnings print — Wells Fargo, Evercore ISI, and RBC all moved targets $5–10 higher while keeping positive ratings. TD Cowen went further on May 14, upgrading to Buy from Hold with a $120 target. The consensus sits at Buy, with a mean price target of $106.25 versus the current price near $95.50, implying roughly 11% upside. However, a cluster of Neutral ratings — UBS at $105, Citigroup at $101, Guggenheim at $97 — and one Underperform from BNP Paribas at $87 undercut the bullish framing. The valuation multiple adds nuance: the forward P/E has drifted lower to around 35.9x over the past month, which reflects the price weakness more than any earnings revision. EPS momentum factor scores are constructive at the 69th–79th percentile, and the dividend score ranks in the 98th percentile, making this a high-yielding consumer name relative to peers.
The bull and bear cases are well-defined. Bulls point to CEO Brian Niccol's operational reset — menu simplification, digital reinvestment, and a credible path to $4.00 EPS by 2028. Bears flag U.S. same-store sales recovery as the critical variable: a discretionary spend story in a softening consumer backdrop, with a still-elevated P/E multiple that leaves little room for slippage. That tension is visible in the peer comparison too: CMG fell nearly as hard as SBUX over the past week, down 9.4%, while WING bucked the sector with a 7.4% gain, suggesting the market is discriminating between restaurant operators with clear earnings momentum and those still in recovery mode. Insider activity over the past 90 days has been exclusively on the sell side — a mix of a division CEO, the CFO, and an EVP trimming modest positions — all at trade significance scores of 1 or 2, low enough to read as routine rather than a directional signal.
The next scheduled earnings date is July 28. Between now and then, the key watchpoint is whether comparable sales data — from any management commentary or sector channel checks — shows the U.S. turnaround accelerating or stalling. The short rebuild this week suggests the skeptics have not been converted by one good quarter.
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