Starbucks (SBUX) closed the most recent trading day at $88.13, moving +1.77% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.01%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq gained 0.32%.
The coffee chain's stock has climbed by 4.61% in the past month, exceeding the Retail-Wholesale sector's gain of 4.04% and lagging the S&P 500's gain of 5.2%.
Investors will be eagerly watching for the performance of Starbucks in its upcoming earnings disclosure. In that report, analysts expect Starbucks to post earnings of $0.66 per share. This would mark a year-over-year decline of 29.03%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.29 billion, up 1.94% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.53 per share and revenue of $36.89 billion. These totals would mark changes of -23.56% and +1.97%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Starbucks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 past month, the Zacks Consensus EPS estimate has shifted 2.89% downward. Right now, Starbucks possesses a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 34.2 right now. This represents a premium compared to its industry's average Forward P/E of 23.58.
Meanwhile, SBUX's PEG ratio is currently 4.35. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Restaurants industry currently had an average PEG ratio of 2.55 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 178, positioning 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.
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Starbucks Corporation (SBUX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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