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Starbucks (SBUX) Gains But Lags Market: What You Should Know

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In the latest trading session, Starbucks (SBUX - Free Report) closed at $58.98, marking a +0.67% move from the previous day. This move lagged the S&P 500's daily gain of 6%. At the same time, the Dow added 5.2%, and the tech-heavy Nasdaq gained 6.23%.

Coming into today, shares of the coffee chain had lost 34.38% in the past month. In that same time, the Retail-Wholesale sector lost 24.7%, while the S&P 500 lost 29.18%.

Wall Street will be looking for positivity from SBUX as it approaches its next earnings report date. On that day, SBUX is projected to report earnings of $0.51 per share, which would represent a year-over-year decline of 15%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.33 billion, up 0.41% 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 $27.67 billion. These totals would mark changes of +1.77% and +4.39%, respectively, from last year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 3.91% lower. SBUX is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, SBUX is holding a Forward P/E ratio of 20.37. This represents a premium compared to its industry's average Forward P/E of 10.91.

Investors should also note that SBUX has a PEG ratio of 1.48 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 1.44 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 84, putting it in the top 33% 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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