In the latest trading session, Starbucks (SBUX) closed at $86.57, marking a -0.62% move from the previous day. This change was narrower than the S&P 500's 2.11% loss on the day. Meanwhile, the Dow lost 1.54%, and the Nasdaq, a tech-heavy index, lost 0.3%.
Heading into today, shares of the coffee chain had gained 3.62% over the past month, outpacing the Retail-Wholesale sector's loss of 6.69% and the S&P 500's loss of 8.19% in that time.
Investors will be hoping for strength from Starbucks as it approaches its next earnings release. In that report, analysts expect Starbucks to post earnings of $0.73 per share. This would mark a year-over-year decline of 27%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.43 billion, up 3.47% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.88 per share and revenue of $32.27 billion, which would represent changes of -11.11% and +11.03%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Starbucks. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.1% lower within the past month. Starbucks is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, Starbucks currently has a Forward P/E ratio of 30.25. Its industry sports an average Forward P/E of 19.47, so we one might conclude that Starbucks is trading at a premium comparatively.
Investors should also note that SBUX has a PEG ratio of 2.35 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. The Retail - Restaurants industry currently had an average PEG ratio of 1.77 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 171, which puts it in the bottom 33% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Starbucks Corporation (SBUX) : Free Stock Analysis Report
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