Starbucks (SBUX) Gains But Lags Market: What You Should Know
Starbucks (SBUX) closed at $83.95 in the latest trading session, marking a +0.07% move from the prior day. This move lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 1.72%.
Heading into today, shares of the coffee chain had gained 6.62% over the past month, outpacing the Retail-Wholesale sector's loss of 3.79% and the S&P 500's loss of 3.29% in that time.
SBUX will be looking to display strength as it nears its next earnings release. On that day, SBUX is projected to report earnings of $0.31 per share, which would represent a year-over-year decline of 55.71%. Our most recent consensus estimate is calling for quarterly revenue of $6.05 billion, down 10.32% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.98 per share and revenue of $23.36 billion, which would represent changes of -65.37% and -11.88%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for SBUX. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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. Within the past 30 days, our consensus EPS projection has moved 0.48% higher. SBUX is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, SBUX currently has a Forward P/E ratio of 85.98. This represents a premium compared to its industry's average Forward P/E of 31.78.
Also, we should mention that SBUX has a PEG ratio of 6.25. 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. The Retail - Restaurants industry currently had an average PEG ratio of 3.68 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% 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.
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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.