In the latest trading session, Starbucks (SBUX) closed at $72.73, marking a +0.11% move from the previous day. This move lagged the S&P 500's daily gain of 1.34%. At the same time, the Dow added 2.13%, and the tech-heavy Nasdaq gained 0.94%.
Prior to today's trading, shares of the coffee chain had lost 5.6% over the past month. This has lagged the Retail-Wholesale sector's gain of 11.54% and the S&P 500's gain of 3.92% in that time.
Investors will be hoping for strength from SBUX as it approaches its next earnings release. On that day, SBUX is projected to report earnings of -$0.60 per share, which would represent a year-over-year decline of 176.92%. Our most recent consensus estimate is calling for quarterly revenue of $4.13 billion, down 39.52% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.80 per share and revenue of $23.14 billion, which would represent changes of -71.73% and -12.69%, respectively, from the prior year.
Any recent changes to analyst estimates for SBUX should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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 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. The Zacks Consensus EPS estimate has moved 0.75% higher within the past month. SBUX is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that SBUX has a Forward P/E ratio of 90.33 right now. This represents a premium compared to its industry's average Forward P/E of 40.33.
It is also worth noting that SBUX currently has a PEG ratio of 6.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SBUX's industry had an average PEG ratio of 4.79 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 50, putting it in the top 20% 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.