All Eyes Are on Starbucks Today. Why a Stock Turnaround Doesn’t Seem Likely.

Starbucks reports earnings after the market close Tuesday. (David Ryder/Getty Images)

All eyes will be on Starbucks CEO Brian Niccol after the close Tuesday as he delivers earnings, about one year after leaving Chipotle Mexican Grill for the top job at the coffeehouse chain.

Through his turnaround plan, Niccol is looking to rebuild the in-store experience and increasing staffing and culture. But so far, Starbucks hasn’t kept up with the broader market’s strength, falling 21% from its 52-week high hit in early March.

Nor has Chipotle, for that matter: Its stock has shed 33% from its own 52-week high last December—with a hefty chunk of those losses coming after last week’s earnings stumble.

Technical signals also suggest these two stocks are at risk of steeper slides, while the shares of one Starbucks rival are getting hotter.

The comparison chart below shows it clearly—both names are badly trailing the broader market. And when stocks can’t keep pace in a bull market, it’s often a signal of deeper cracks under the surface.

The Starbucks chart shows signs of exhaustion. Most notably, the stock undercut its April 7 low on April 30, just as the broader market was accelerating. It’s now retesting the breakdown from the April 3 bear flag, which triggered an 11% slide. Attempts to reclaim the 200-day moving average have twice failed in July—a red flag that often precedes further downside.

Until it can decisively clear the two-month consolidation zone, Starbucks looks stuck in the penalty box, with potential risk for the stock to dip down to the mid-$80s. It traded at $92.94 Tuesday.

While Starbucks stalls, peer Luckin Coffee’s U.S.-listed American depositary receipts are gaining steam. The ADR is up 47% year to date, handily outperforming its more established rival.

The stock is currently retesting a breakout from a bullish ascending triangle formed between mid-April and late June—a pattern marked by higher lows and a horizontal resistance line at $36. Now building a cup base through July, a move above the round $40 level could ignite the next leg higher.

The chart is signaling strength, and price action suggests that investors are betting on further U.S. expansion for the company, which reports earnings Wednesday before the market open.

Luckin Coffee traded at $37.34 Tuesday.

Dutch Bros, the drive-thru coffee upstart, has brewed up a respectable 11% year-to-date gain, outpacing Starbucks, which has managed just 1% in 2025.

The stock is now testing its 200-day simple moving average, a secular line of how many market professionals determine the long-term trajectory of a stock. The last time it touched this line, in early April, it sparked a strong bounce, mirroring broader market momentum. But the rally fizzled after a well-placed doji candle on June 5 signaled exhaustion.

With Dutch Bros shares now 27% off that high, a breakdown below $55 could open the door to a decline into the mid-$40s by the end of the third quarter. The stock traded at $58.20 on Tuesday.

Write to Doug Busch at douglas.busch@barrons.com