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Starbucks (SBUX) Gains As Market Dips: What You Should Know

Zacks Equity Research

Starbucks (SBUX) closed the most recent trading day at $78.43, moving +0.18% from the previous trading session. The stock outpaced the S&P 500's daily loss of 3.17%. Meanwhile, the Dow lost 3.77%, and the Nasdaq, a tech-heavy index, lost 2.28%.

Coming into today, shares of the coffee chain had lost 8.8% in the past month. In that same time, the Retail-Wholesale sector lost 3.38%, while the S&P 500 lost 8.05%.

Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. The company is expected to report EPS of $0.58, down 3.33% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.50 billion, up 3.04% from the year-ago period.

SBUX's full-year Zacks Consensus Estimates are calling for earnings of $2.99 per share and revenue of $28.03 billion. These results would represent year-over-year changes of +5.65% and +5.75%, respectively.

Investors should also note any recent changes to analyst estimates for SBUX. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 0.69% lower. SBUX is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, SBUX is holding a Forward P/E ratio of 26.18. This valuation marks a premium compared to its industry's average Forward P/E of 19.78.

Meanwhile, SBUX's PEG ratio is currently 1.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 2.11 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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