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Starbucks (SBUX) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Starbucks (SBUX) closed at $95.58, marking a -1.47% move from the previous day. This move lagged the S&P 500's daily loss of 0.15%. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Coming into today, shares of the coffee chain had lost 16.06% in the past month. In that same time, the Retail-Wholesale sector lost 11.49%, while the S&P 500 lost 7.66%.

Investors will be hoping for strength from Starbucks as it approaches its next earnings release, which is expected to be February 1, 2022. On that day, Starbucks is projected to report earnings of $0.80 per share, which would represent year-over-year growth of 31.15%. Meanwhile, our latest consensus estimate is calling for revenue of $7.99 billion, up 18.38% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.44 per share and revenue of $32.67 billion. These totals would mark changes of +6.17% and +12.42%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Starbucks. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

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 0.08% lower within the past month. Starbucks is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 28.17 right now. For comparison, its industry has an average Forward P/E of 20.27, which means Starbucks is trading at a premium to the group.

Investors should also note that SBUX has a PEG ratio of 1.42 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.76 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 234, putting it in the bottom 9% 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.

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


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