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

Zacks Equity Research
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Starbucks (SBUX) closed the most recent trading day at $82.96, moving -0.07% from the previous trading session. This move lagged the S&P 500's daily gain of 0.97%. Elsewhere, the Dow gained 1.35%, while the tech-heavy Nasdaq added 1.39%.

Heading into today, shares of the coffee chain had gained 8.3% over the past month, outpacing the Retail-Wholesale sector's gain of 1.48% and the S&P 500's gain of 0.64% in that time.

Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. In that report, analysts expect SBUX to post earnings of $0.73 per share. This would mark year-over-year growth of 17.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.68 billion, up 5.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.78 per share and revenue of $26.24 billion. These totals would mark changes of +14.88% and +6.16%, respectively, from last 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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% higher. SBUX is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, SBUX is holding a Forward P/E ratio of 29.86. This valuation marks a premium compared to its industry's average Forward P/E of 23.13.

Meanwhile, SBUX's PEG ratio is currently 2.33. 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 2.1 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 100, which puts it in the top 40% 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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