In the latest close session, Starbucks (SBUX) was down 1.66% at $84.27. This move lagged the S&P 500's daily loss of 0.29%. At the same time, the Dow lost 0.37%, and the tech-heavy Nasdaq lost 0.34%.
Heading into today, shares of the coffee chain had lost 1.09% over the past month, lagging the Retail-Wholesale sector's gain of 0.17% and the S&P 500's gain of 3.08%.
Market participants will be closely following the financial results of Starbucks in its upcoming release. On that day, Starbucks is projected to report earnings of $0.59 per share, which would represent a year-over-year decline of 26.25%. Meanwhile, the latest consensus estimate predicts the revenue to be $9.43 billion, indicating a 3.91% increase compared to the same quarter of the previous 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 might also notice recent changes to analyst estimates for Starbucks. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.68% lower. Starbucks presently features a Zacks Rank of #4 (Sell).
Digging into valuation, Starbucks currently has a Forward P/E ratio of 39.07. For comparison, its industry has an average Forward P/E of 22.87, which means Starbucks is trading at a premium to the group.
It's also important to note that SBUX currently trades at a PEG ratio of 5.12. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.27 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 183, this industry ranks in the bottom 26% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Starbucks Corporation (SBUX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
