Back to top

Image: Bigstock

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

Read MoreHide Full Article

Starbucks (SBUX - Free Report) closed at $114.74 in the latest trading session, marking a +1.11% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.82%.

Coming into today, shares of the coffee chain had gained 0.26% in the past month. In that same time, the Retail-Wholesale sector gained 1.34%, while the S&P 500 gained 2.31%.

On that day, SBUX is projected to report earnings of $0.77 per share, which would represent year-over-year growth of 267.39%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.22 billion, up 71.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.95 per share and revenue of $28.76 billion. These totals would mark changes of +152.14% and +22.28%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for SBUX. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.2% higher. SBUX is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that SBUX has a Forward P/E ratio of 38.42 right now. Its industry sports an average Forward P/E of 35.88, so we one might conclude that SBUX is trading at a premium comparatively.

Also, we should mention that SBUX has a PEG ratio of 3.2. 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 3.2 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 97, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Starbucks Corporation (SBUX) - free report >>

Published in