Yahoo Finance Starbucks (SBUX) Stock Sinks As Market Gains: What You Should Know
Starbucks (SBUX) closed the most recent trading day at $116.25, moving -0.01% from the previous trading session. This move lagged the S&P 500's daily gain of 0.31%. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, added 0.48%.
Coming into today, shares of the coffee chain had gained 1.87% in the past month. In that same time, the Retail-Wholesale sector lost 2.72%, while the S&P 500 lost 0.04%.
Starbucks will be looking to display strength as it nears its next earnings release. On that day, Starbucks is projected to report earnings of $0.79 per share, which would represent year-over-year growth of 29.51%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.97 billion, up 18.05% from the year-ago period.
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 +12.44%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Starbucks. These revisions help to show the ever-changing nature of near-term business trends. 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.62% lower. Starbucks is currently a Zacks Rank #5 (Strong Sell).
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 33.75. For comparison, its industry has an average Forward P/E of 24.83, which means Starbucks is trading at a premium to the group.
Also, we should mention that SBUX has a PEG ratio of 1.7. 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. The Retail - Restaurants was holding an average PEG ratio of 1.95 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 240, putting it in the bottom 6% 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.
To follow SBUX in the coming trading sessions, be sure to utilize Zacks.com.
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