Starbucks (SBUX) ended the recent trading session at $98.47, demonstrating a +1.02% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 1.18%. Elsewhere, the Dow saw an upswing of 0.66%, while the tech-heavy Nasdaq appreciated by 1.96%.
Shares of the coffee chain have depreciated by 0.35% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 5.24%, and the S&P 500's gain of 3.93%.
Market participants will be closely following the financial results of Starbucks in its upcoming release. The company is expected to report EPS of $0.42, up 2.44% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $9.1 billion, indicating a 3.87% growth compared to the corresponding quarter of the prior year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.31 per share and a revenue of $38.37 billion, signifying shifts of +8.45% and +3.18%, respectively, from the last year.
Investors should also note any recent changes to analyst estimates for Starbucks. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, there's been a 0.03% rise in the Zacks Consensus EPS estimate. At present, Starbucks boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 42.27. This expresses a premium compared to the average Forward P/E of 19.15 of its industry.
One should further note that SBUX currently holds a PEG ratio of 2.17. 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. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 1.85.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 183, finds itself in the bottom 25% echelons 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
SeeWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Starbucks Corporation (SBUX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).