In the latest trading session, Starbucks (SBUX - Free Report) closed at $84.88, marking a -1.14% move from the previous day. This change was narrower than the S&P 500's 1.76% loss on the day. At the same time, the Dow lost 1.45%, and the tech-heavy Nasdaq lost 1.99%.
Coming into today, shares of the coffee chain had gained 8.29% in the past month. In that same time, the Retail-Wholesale sector gained 4.1%, while the S&P 500 gained 1.56%.
SBUX will be looking to display strength as it nears its next earnings release. In that report, analysts expect SBUX to post earnings of $0.31 per share. This would mark a year-over-year decline of 55.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.02 billion, down 10.84% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.97 per share and revenue of $23.33 billion. These totals would mark changes of -65.72% and -12%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for SBUX. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SBUX currently has a Zacks Rank of #3 (Hold).
In terms of valuation, SBUX is currently trading at a Forward P/E ratio of 88.45. For comparison, its industry has an average Forward P/E of 34.77, which means SBUX is trading at a premium to the group.
Meanwhile, SBUX's PEG ratio is currently 6.43. 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 3.87 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 107, putting it in the top 43% 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.