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Starbucks (SBUX) Gains As Market Dips: What You Should Know

Starbucks (SBUX) closed the most recent trading day at $56.75, moving +0.53% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.59%. At the same time, the Dow lost 0.35%, and the tech-heavy Nasdaq lost 0.88%.

Coming into today, shares of the coffee chain had gained 2.84% in the past month. In that same time, the Retail-Wholesale sector lost 9.59%, while the S&P 500 lost 4.1%.

Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. This is expected to be November 1, 2018. The company is expected to report EPS of $0.59, up 7.27% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.20 billion, up 8.81% from the year-ago period.

It is also important to note the recent changes to analyst estimates for SBUX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 past month, the Zacks Consensus EPS estimate has moved 0.03% lower. SBUX is currently a Zacks Rank #3 (Hold).

Digging into valuation, SBUX currently has a Forward P/E ratio of 21.52. This represents a discount compared to its industry's average Forward P/E of 22.11.

Investors should also note that SBUX has a PEG ratio of 1.54 right now. 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. SBUX's industry had an average PEG ratio of 1.94 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow SBUX in the coming trading sessions, be sure to utilize 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.


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

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