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Starbucks (SBUX) Stock Slides as Market Rises: Facts to Know Before You Trade

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Starbucks (SBUX - Free Report) closed the most recent trading day at $94.32, moving -1.12% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.38%. Meanwhile, the Dow experienced a rise of 0.24%, and the technology-dominated Nasdaq saw an increase of 0.24%.

Heading into today, shares of the coffee chain had gained 10.23% over the past month, outpacing the Retail-Wholesale sector's gain of 2.95% and the S&P 500's gain of 6.6%.

Analysts and investors alike will be keeping a close eye on the performance of Starbucks in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.66, indicating a 29.03% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $9.29 billion, indicating a 1.94% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.53 per share and revenue of $36.89 billion, indicating changes of -23.56% and +1.97%, respectively, compared to the previous year.

Investors should also pay attention to any latest changes in analyst estimates for Starbucks. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.46% decrease. At present, Starbucks boasts a Zacks Rank of #4 (Sell).

Digging into valuation, Starbucks currently has a Forward P/E ratio of 37.67. For comparison, its industry has an average Forward P/E of 23.8, which means Starbucks is trading at a premium to the group.

We can additionally observe that SBUX currently boasts a PEG ratio of 4.79. 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. By the end of yesterday's trading, the Retail - Restaurants industry had an average PEG ratio of 2.53.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 178, putting it in the bottom 28% 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.

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


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