The latest trading session saw Starbucks (SBUX) ending at $98.42, denoting a +0.26% adjustment from its last day's close. This change lagged the S&P 500's 0.82% gain on the day. Meanwhile, the Dow experienced a drop of 0.22%, and the technology-dominated Nasdaq saw an increase of 1.77%.
Heading into today, shares of the coffee chain had lost 0.65% over the past month, lagging the Retail-Wholesale sector's gain of 5.65% and the S&P 500's gain of 0.8% in that time.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company's earnings per share (EPS) are projected to be $0.66, reflecting a 26.67% decrease from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $9.33 billion, reflecting a 1% fall from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $3.11 per share and a revenue of $37.33 billion, demonstrating changes of -6.04% and +3.18%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Starbucks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.34% lower within the past month. At present, Starbucks boasts a Zacks Rank of #5 (Strong Sell).
Looking at valuation, Starbucks is presently trading at a Forward P/E ratio of 31.55. This represents a premium compared to its industry's average Forward P/E of 25.56.
It is also worth noting that SBUX currently has a PEG ratio of 2.88. 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. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 2.42.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 130, positioning it in the bottom 49% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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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.
