Starbucks (SBUX) Gains As Market Dips: What You Should Know
Starbucks (SBUX) closed the most recent trading day at $65.92, moving +0.66% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.04%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq gained 0.16%.
Coming into today, shares of the coffee chain had lost 3.56% in the past month. In that same time, the Retail-Wholesale sector lost 5.09%, while the S&P 500 lost 4.99%.
Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. This is expected to be January 24, 2019. In that report, analysts expect SBUX to post earnings of $0.64 per share. This would mark a year-over-year decline of 1.54%. Meanwhile, our latest consensus estimate is calling for revenue of $6.47 billion, up 6.53% from the prior-year quarter.
SBUX's full-year Zacks Consensus Estimates are calling for earnings of $2.64 per share and revenue of $26.11 billion. These results would represent year-over-year changes of +9.09% and +5.62%, respectively.
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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. SBUX is currently a Zacks Rank #3 (Hold).
In terms of valuation, SBUX is currently trading at a Forward P/E ratio of 24.76. This valuation marks a premium compared to its industry's average Forward P/E of 23.5.
Also, we should mention that SBUX has a PEG ratio of 1.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 1.83 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 25% 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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