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

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Starbucks (SBUX - Free Report) closed at $64.19 in the latest trading session, marking a +0.49% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.45%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 0.42%.

Heading into today, shares of the coffee chain had lost 3.4% over the past month, lagging the Retail-Wholesale sector's gain of 0.15% and the S&P 500's loss of 1.64% in that time.

Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. This is expected to be January 24, 2019. On that day, SBUX is projected to report earnings of $0.65 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.48 billion, up 6.76% from the prior-year quarter.

SBUX's full-year Zacks Consensus Estimates are calling for earnings of $2.64 per share and revenue of $26.12 billion. These results would represent year-over-year changes of +9.09% and +5.68%, respectively.

Investors might also notice recent changes to analyst estimates for SBUX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 0.1% lower. SBUX is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that SBUX has a Forward P/E ratio of 24.18 right now. This valuation marks a premium compared to its industry's average Forward P/E of 20.64.

Meanwhile, SBUX's PEG ratio is currently 1.79. 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. The Retail - Restaurants industry currently had an average PEG ratio of 1.62 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.



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