Starbucks (SBUX) Gains But Lags Market: What You Should Know

In the latest trading session, Starbucks (SBUX) closed at $97.21, marking a +1.98% move from the previous day. The stock lagged the S&P 500's daily gain of 2.44%. Elsewhere, the Dow gained 1.65%, while the tech-heavy Nasdaq added 0.28%.

Prior to today's trading, shares of the coffee chain had lost 18% over the past month. This has lagged the Retail-Wholesale sector's loss of 13.11% and the S&P 500's loss of 9.65% in that time.

Investors will be hoping for strength from Starbucks as it approaches its next earnings release, which is expected to be February 1, 2022. In that report, analysts expect Starbucks to post earnings of $0.80 per share. This would mark year-over-year growth of 31.15%. Our most recent consensus estimate is calling for quarterly revenue of $7.99 billion, up 18.38% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.44 per share and revenue of $32.67 billion. These totals would mark changes of +6.17% and +12.42%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.08% lower. Starbucks currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Starbucks is holding a Forward P/E ratio of 27.67. This represents a premium compared to its industry's average Forward P/E of 19.48.

Investors should also note that SBUX has a PEG ratio of 1.4 right now. 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 1.74 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 232, putting it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.