“On Wall Street, people get paid more money than anywhere else in the world to deceive you, to lie to you.” – Keith McCullough 

A few weeks after Starbucks (SBUX) claimed “everything was great” on its earnings call, new CEO Laxman Narasimhan did a 180 in a sobering presentation to investors at a Morgan Stanley conference. 

“The honeymoon is officially over,” Howard Penney says in this clip from The Call @ Hedgeye. “He talked about challenges in the U.S. market and acknowledged what we’re seeing and talking about with a slowdown in the U.S., and actually talked about geopolitical and economic concerns around the world.” 

Despite the bullish messaging on its Q3 earnings, Hedgeye’s Consumables analyst stood by his “Best Idea” Short. The stock is down -10% the past three weeks. It’s the latest example of why our analysts trust the data, not CEO narratives. 

“I was part of a management team once, I know the BS they spew out,” adds Retail analyst Brian McGough. “They tell you want they want you to believe.”  

“You get to be CEO of a company by being a salesman, and you sell your story to investors. Investors tend to believe what CEOs tell them. Believe your own work and research, not what a management team spews on a conference call or in a double-secret, one-on-one at a Morgan Stanley conference.” 

Click above for the full clip.

‘The Honeymoon is Over’: Starbucks CEO Admits Bleak Economic Reality - Call Banner