In the latest trading session, Starbucks (SBUX – Free Report) closed at $90.58, marking a -1.81% move from the previous day. The stock’s change was less than the S&P 500’s daily loss of 1.07%. Elsewhere, the Dow lost 0.97%, while the tech-heavy Nasdaq lost 1.19%.
Coming into today, shares of the coffee chain had lost 9.96% in the past month. In that same time, the Retail-Wholesale sector gained 0.46%, while the S&P 500 lost 0.36%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company is forecasted to report an EPS of $0.66, showcasing a 26.67% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $9.33 billion, down 1% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.11 per share and a revenue of $37.33 billion, indicating changes of -6.04% and +3.18%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for Starbucks. 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.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.25% lower. As of now, Starbucks holds a Zacks Rank of #5 (Strong Sell).
Looking at its valuation, Starbucks is holding a Forward P/E ratio of 29.65. Its industry sports an average Forward P/E of 24.99, so one might conclude that Starbucks is trading at a premium comparatively.
Investors should also note that SBUX has a PEG ratio of 2.71 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. As of the close of trade yesterday, the Retail – Restaurants industry held an average PEG ratio of 2.31.
The Retail – Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 80, placing it within the top 32% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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