Has Starbucks found support?

The good and the bad

After Starbucks’ baristas launched a strike over the holidays, the stock sunk amid the labour dispute and the potential for higher operating costs. And while the crisis has calmed, shares are still well below the $102 zone that preceded the drama.

But BTIG analyst Peter Saleh named Starbucks one of his top first-half 2025 picks on Jan. 2 with a $115 price target. He wrote:

“We believe that progress [on faster service times, simpler pricing, and better store operations] in 2025 will set the stage for outsized same-store sales and earnings growth in 2026 and beyond, catalysing shares as we progress through the year and that recovery trajectory emerges.”

In other words, if Starbucks demonstrates material progress in its turnaround initiatives in 2025, the stock should benefit as investors price in a return to growth in 2026.

A January rebound?

Despite the December doldrums, Starbucks managed to bounce near $89 support. If you analyse the horizontal white line, you can see that Starbucks passed the test by recovering before the end of the month.

As a result, it could provide a solid foundation until the next leg higher begins.

Still trending

Another positive development was Starbucks recouping its long-term trendline. If you focus your attention on the upward-sloping white line, you can see that Starbucks held and still trades above the intramonth lows set in 2020 and 2022.

Consequently, it may be another sign of a forthcoming recovery.

A monthly plan

While daily volatility may persist amid the S&P 500’s recent struggles, long-term traders should monitor both support levels to help predict Starbucks’ next move. As long as the stock holds above $89 and trendline support, the bullish backdrop should eventually foster higher prices.

If not, and a breakdown occurs, next-level support is closer to $83. Therefore, it could be wise to place a stop-loss order near $88 and look to re-enter when Starbucks recoups $89.