Advertisement
New Zealand markets open in 7 hours 59 minutes
  • NZX 50

    11,809.48
    +77.20 (+0.66%)
     
  • NZD/USD

    0.6112
    +0.0015 (+0.25%)
     
  • ALL ORDS

    8,083.10
    -35.20 (-0.43%)
     
  • OIL

    78.31
    +0.74 (+0.95%)
     
  • GOLD

    2,354.30
    -38.60 (-1.61%)
     

Starbucks (SBUX) Outpaces Stock Market Gains: What You Should Know

Starbucks (SBUX) closed at $108.76 in the latest trading session, marking a +1.66% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.1%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 6.59%.

Prior to today's trading, shares of the coffee chain had gained 8.5% over the past month. This has lagged the Retail-Wholesale sector's gain of 8.83% and outpaced the S&P 500's gain of 4.58% in that time.

Wall Street will be looking for positivity from Starbucks as it approaches its next earnings report date. This is expected to be February 2, 2023. On that day, Starbucks is projected to report earnings of $0.77 per share, which would represent year-over-year growth of 6.94%. Our most recent consensus estimate is calling for quarterly revenue of $8.8 billion, up 9.31% from the year-ago period.

SBUX's full-year Zacks Consensus Estimates are calling for earnings of $3.42 per share and revenue of $36.03 billion. These results would represent year-over-year changes of +15.54% and +11.71%, respectively.

ADVERTISEMENT

Investors might also notice 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. Starbucks is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 31.31 right now. For comparison, its industry has an average Forward P/E of 22.34, which means Starbucks is trading at a premium to the group.

It is also worth noting that SBUX currently has a PEG ratio of 2.26. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.03 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 183, which puts it in the bottom 28% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research