Starbucks (SBUX) ended the recent trading session at $84.19, demonstrating a +1.82% change from the preceding day's closing price. The stock outpaced the S&P 500's daily loss of 0.13%. Meanwhile, the Dow experienced a drop of 0.27%, and the technology-dominated Nasdaq saw a decrease of 0.07%.
Shares of the coffee chain have depreciated by 10.66% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 2.5%, and the S&P 500's gain of 2.71%.
Market participants will be closely following the financial results of Starbucks in its upcoming release. The company is predicted to post an EPS of $0.59, indicating a 26.25% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $9.43 billion, indicating a 3.91% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.19 per share and revenue of $37.04 billion. These totals would mark changes of -33.84% and +2.4%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Starbucks. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.72% decrease. Starbucks is currently sporting a Zacks Rank of #4 (Sell).
Investors should also note Starbucks's current valuation metrics, including its Forward P/E ratio of 37.7. This expresses a premium compared to the average Forward P/E of 20.14 of its industry.
We can additionally observe that SBUX currently boasts a PEG ratio of 4.94. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Restaurants industry had an average PEG ratio of 2.32 as trading concluded yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 182, finds itself in the bottom 27% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Starbucks Corporation (SBUX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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