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

Starbucks (SBUX) closed at $115.57 in the latest trading session, marking a +1.18% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.1%. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Coming into today, shares of the coffee chain had gained 3.15% in the past month. In that same time, the Retail-Wholesale sector lost 2.28%, while the S&P 500 gained 4.4%.

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 $0.80 per share. This would mark year-over-year growth of 31.15%. Meanwhile, our latest consensus estimate is calling for revenue of $7.99 billion, up 18.44% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.45 per share and revenue of $32.68 billion. These totals would mark changes of +6.48% and +12.45%, respectively, from last year.

Any recent changes to analyst estimates for Starbucks should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.56% lower within the past month. Starbucks is currently a Zacks Rank #5 (Strong Sell).

Digging into valuation, Starbucks currently has a Forward P/E ratio of 33.13. This represents a premium compared to its industry's average Forward P/E of 24.55.

We can also see that SBUX currently has a PEG ratio of 1.67. 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 was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 225, putting it in the bottom 12% 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.

Be sure to follow all of these stock-moving metrics, and many more, on 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.