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Starbucks (SBUX) Outpaces Stock Market Gains: What You Should Know

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Starbucks (SBUX) closed at $114.44 in the latest trading session, marking a +0.51% move from the prior day. This change outpaced the S&P 500's 0.3% gain on the day.

Coming into today, shares of the coffee chain had gained 0.7% in the past month. In that same time, the Retail-Wholesale sector gained 2.41%, while the S&P 500 gained 4.28%.

SBUX will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2021. In that report, analysts expect SBUX to post earnings of $1 per share. This would mark year-over-year growth of 96.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.26 billion, up 33.21% from the year-ago period.

Investors might also notice recent changes to analyst estimates for SBUX. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.12% lower. SBUX is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, SBUX is currently trading at a Forward P/E ratio of 30.61. This valuation marks a premium compared to its industry's average Forward P/E of 21.61.

Investors should also note that SBUX has a PEG ratio of 1.51 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 industry currently had an average PEG ratio of 2.32 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 175, putting it in the bottom 32% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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