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

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Starbucks (SBUX - Free Report) closed at $75.70 in the latest trading session, marking a -0.6% move from the prior day. This move lagged the S&P 500's daily gain of 0.05%. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq gained 0.3%.

Prior to today's trading, shares of the coffee chain had gained 7.51% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.01% and the S&P 500's gain of 3.08% 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 April 25, 2019. In that report, analysts expect SBUX to post earnings of $0.56 per share. This would mark year-over-year growth of 5.66%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.31 billion, up 4.54% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.72 per share and revenue of $26.28 billion. These totals would mark changes of +12.4% and +6.33%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for SBUX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, the Zacks Consensus EPS estimate has moved 0.07% higher. SBUX is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, SBUX is holding a Forward P/E ratio of 27.97. This represents a premium compared to its industry's average Forward P/E of 21.92.

We can also see that SBUX currently has a PEG ratio of 2.18. 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 2.02 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 40% 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.


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