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In the latest trading session, Starbucks (SBUX) closed at $83.27, marking a +0.87% move from the previous day. This change outpaced the S&P 500's 0.59% gain on the day. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq lost 0.02%.
Heading into today, shares of the coffee chain had gained 13.14% over the past month, outpacing the Retail-Wholesale sector's gain of 8.9% and the S&P 500's gain of 7.25% in that time.
Investors will be hoping for strength from Starbucks as it approaches its next earnings release, which is expected to be August 2, 2022. On that day, Starbucks is projected to report earnings of $0.77 per share, which would represent a year-over-year decline of 23.76%. Meanwhile, our latest consensus estimate is calling for revenue of $8.21 billion, up 9.58% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.86 per share and revenue of $32.34 billion, which would represent changes of -11.73% and +11.27%, respectively, from the prior year.
Any recent changes to analyst estimates for Starbucks should also be noted by investors. 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.21% lower within the past month. Starbucks is currently a Zacks Rank #4 (Sell).
Investors should also note Starbucks's current valuation metrics, including its Forward P/E ratio of 28.84. This valuation marks a premium compared to its industry's average Forward P/E of 19.71.
Investors should also note that SBUX has a PEG ratio of 2.46 right now. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.86 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 23% 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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