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Starbucks (SBUX) Gains But Lags Market: What You Should Know

·3 min read
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Starbucks (SBUX) closed at $110.97 in the latest trading session, marking a +1.16% move from the prior day. This move lagged the S&P 500's daily gain of 1.4%.

Heading into today, shares of the coffee chain had lost 1.1% over the past month, lagging the Retail-Wholesale sector's gain of 1.42% and the S&P 500's gain of 1.07% in that time.

Investors will be hoping for strength from SBUX as it approaches its next earnings release. On that day, SBUX is projected to report earnings of $0.76 per share, which would represent year-over-year growth of 265.22%. Our most recent consensus estimate is calling for quarterly revenue of $7.23 billion, up 71.17% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.98 per share and revenue of $28.74 billion. These totals would mark changes of +154.7% and +22.2%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for SBUX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SBUX is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note SBUX's current valuation metrics, including its Forward P/E ratio of 36.84. This represents a premium compared to its industry's average Forward P/E of 27.64.

It is also worth noting that SBUX currently has a PEG ratio of 3.07. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants industry currently had an average PEG ratio of 2.78 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SBUX in the coming trading sessions, be sure to utilize Zacks.com.

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Starbucks Corporation (SBUX) : Free Stock Analysis Report

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