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Starbucks (SBUX) Outpaces Stock Market Gains: What You Should Know

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Starbucks (SBUX) closed at $117.42 in the latest trading session, marking a +1.82% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.52%.

Heading into today, shares of the coffee chain had gained 3.92% over the past month, outpacing the Retail-Wholesale sector's loss of 1.17% and the S&P 500's gain of 2.41% in that time.

Investors will be hoping for strength from SBUX as it approaches its next earnings release, which is expected to be July 27, 2021. In that report, analysts expect SBUX to post earnings of $0.76 per share. This would mark year-over-year growth of 265.22%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.24 billion, up 71.47% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.98 per share and revenue of $28.75 billion, which would represent changes of +154.7% and +22.25%, respectively, from the prior year.

Any recent changes to analyst estimates for SBUX should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. SBUX is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, SBUX is currently trading at a Forward P/E ratio of 38.7. This valuation marks a premium compared to its industry's average Forward P/E of 25.99.

Also, we should mention that SBUX has a PEG ratio of 3.22. 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. SBUX's industry had an average PEG ratio of 2.84 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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