Investment Review №354. AI lends a hand to the bulls

Trade Thesis

Buy Starbucks (SBUX) 100 Call as a bet on the continuation of Starbucks’ operating recovery. Q3 confirmed stronger traffic and comparable sales, management raised guidance, and margins started to improve. If the trend continues, the stock could return toward $110–115.

Key Arguments

• Global Q3 comparable sales rose 7.9% and transactions increased 4.2%, confirming a genuine recovery in customer traffic.
• Adjusted operating margin improved to 14.4% and management raised guidance; further margin recovery is the next key catalyst.
• The pullback toward $100 offers a better entry point. Lower coffee prices could provide additional support to margins.

Risk Management

Trade parameters

P/L of the Option Strategy