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Starbucks (SBUX) Outperforms Broader Market: What You Need to Know

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The most recent trading session ended with Starbucks (SBUX - Free Report) standing at $88.75, reflecting a +1% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily gain of 0.02%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq added 0.1%.

Heading into today, shares of the coffee chain had lost 2.76% over the past month, lagging the Retail-Wholesale sector's loss of 2.56% and outpacing the S&P 500's loss of 3.01% in that time.

Market participants will be closely following the financial results of Starbucks in its upcoming release. The company plans to announce its earnings on April 30, 2024. The company is predicted to post an EPS of $0.80, indicating an 8.11% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $9.15 billion, up 4.89% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.99 per share and a revenue of $38.58 billion, representing changes of +12.71% and +7.25%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Starbucks. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Over the past month, there's been a 1.71% fall in the Zacks Consensus EPS estimate. As of now, Starbucks holds a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 22.02 right now. This represents a premium compared to its industry's average Forward P/E of 21.97.

We can additionally observe that SBUX currently boasts a PEG ratio of 1.48. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 1.95.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 159, finds itself in the bottom 37% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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