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Starbucks (SBUX) Gains But Lags Market: What You Should Know

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Starbucks (SBUX) closed the most recent trading day at $113.07, moving +0.76% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.95%.

Prior to today's trading, shares of the coffee chain had lost 2.49% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.55% and the S&P 500's loss of 1.87% in that time.

Investors will be hoping for strength from SBUX as it approaches its next earnings release. In that report, analysts expect SBUX to post earnings of $1.01 per share. This would mark year-over-year growth of 98.04%. Our most recent consensus estimate is calling for quarterly revenue of $8.28 billion, up 33.4% from the year-ago period.

SBUX's full-year Zacks Consensus Estimates are calling for earnings of $3.24 per share and revenue of $29.19 billion. These results would represent year-over-year changes of +176.92% and +24.1%, respectively.

Investors might also notice recent changes to analyst estimates for SBUX. These revisions help to show the ever-changing nature of near-term business trends. 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. 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 0.11% lower within the past month. SBUX is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SBUX is currently trading at a Forward P/E ratio of 34.6. For comparison, its industry has an average Forward P/E of 23.15, which means SBUX is trading at a premium to the group.

Investors should also note that SBUX has a PEG ratio of 2.88 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. The Retail - Restaurants was holding an average PEG ratio of 2.4 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 127, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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