In the latest trading session, Starbucks (SBUX) closed at $92, marking a -0.8% move from the previous day. This change was narrower than the S&P 500's daily loss of 1.47%. Elsewhere, the Dow lost 1.14%, while the tech-heavy Nasdaq lost 1.57%.
Prior to today's trading, shares of the coffee chain had lost 4.43% over the past month. This has lagged the Retail-Wholesale sector's loss of 1.09% and the S&P 500's loss of 1.43% in that time.
Wall Street will be looking for positivity from Starbucks as it approaches its next earnings report date. On that day, Starbucks is projected to report earnings of $0.96 per share, which would represent year-over-year growth of 18.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.23 billion, up 9.67% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.45 per share and revenue of $35.83 billion. These totals would mark changes of +16.55% and +11.1%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Starbucks. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. Starbucks is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 26.85. Its industry sports an average Forward P/E of 20.73, so we one might conclude that Starbucks is trading at a premium comparatively.
It is also worth noting that SBUX currently has a PEG ratio of 1.63. 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 1.66 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 75, which puts it in the top 30% 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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