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Starbucks (SBUX) closed the latest trading day at $87.44, indicating a -0.6% change from the previous session's end. This move lagged the S&P 500's daily gain of 0.73%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw an increase of 0.98%.
The the stock of coffee chain has fallen by 14.18% in the past month, lagging the Retail-Wholesale sector's gain of 3.93% and the S&P 500's gain of 0.34%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. It is anticipated that the company will report an EPS of $0.66, marking a 26.67% fall compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $9.33 billion, down 1% from the year-ago period.
SBUX's full-year Zacks Consensus Estimates are calling for earnings of $3.11 per share and revenue of $37.33 billion. These results would represent year-over-year changes of -6.04% and +3.18%, respectively.
Investors should also note any recent changes to analyst estimates for Starbucks. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.25% lower. Starbucks presently features a Zacks Rank of #5 (Strong Sell).
Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 28.28 right now. For comparison, its industry has an average Forward P/E of 24.91, which means Starbucks is trading at a premium to the group.
One should further note that SBUX currently holds a PEG ratio of 2.58. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Retail - Restaurants industry held an average PEG ratio of 2.28.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 131, putting it in the bottom 48% of all 250+ industries.