You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Starbucks (SBUX) Stock Sinks As Market Gains: What You Should Know
Starbucks (SBUX - Free Report) closed at $88.64 in the latest trading session, marking a -0.92% move from the prior day. This change lagged the S&P 500's 1.53% gain on the day. Meanwhile, the Dow gained 1.19%, and the Nasdaq, a tech-heavy index, added 0.14%.
Heading into today, shares of the coffee chain had gained 2.51% over the past month, outpacing the Retail-Wholesale sector's loss of 2.1% and the S&P 500's loss of 3.1% in that time.
Starbucks will be looking to display strength as it nears its next earnings release. In that report, analysts expect Starbucks to post earnings of $0.74 per share. This would mark a year-over-year decline of 26%. Our most recent consensus estimate is calling for quarterly revenue of $8.42 billion, up 3.32% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.88 per share and revenue of $32.25 billion. These totals would mark changes of -11.11% and +10.99%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Starbucks. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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. The Zacks Consensus EPS estimate has moved 0.17% lower within the past month. Starbucks is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 31.04. Its industry sports an average Forward P/E of 19.63, so we one might conclude that Starbucks is trading at a premium comparatively.
We can also see that SBUX currently has a PEG ratio of 2.79. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.14 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 182, putting it in the bottom 28% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.