The most recent trading session ended with Starbucks (SBUX) standing at $79.69, reflecting a -0.39% shift from the previouse trading day's closing. The stock outperformed the S&P 500, which registered a daily loss of 1.57%. At the same time, the Dow lost 0.84%, and the tech-heavy Nasdaq lost 2.15%.
The the stock of coffee chain has fallen by 20.89% in the past month, lagging the Retail-Wholesale sector's loss of 11.13% and the S&P 500's loss of 12.16%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company's upcoming EPS is projected at $0.51, signifying a 25% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $8.85 billion, indicating a 3.35% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $2.97 per share and a revenue of $37.4 billion, demonstrating changes of -10.27% and +3.4%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Starbucks. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.8% decrease. Starbucks is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Starbucks is holding a Forward P/E ratio of 26.97. This valuation marks a premium compared to its industry's average Forward P/E of 20.95.
Meanwhile, SBUX's PEG ratio is currently 2.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Retail - Restaurants industry stood at 1.96 at the close of the market yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 179, putting it in the bottom 28% of all 250+ industries.
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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in 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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