Starbucks (SBUX) closed at $106.17 in the latest trading session, marking a -1.09% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.38%. Meanwhile, the Dow experienced a rise of 0.02%, and the technology-dominated Nasdaq saw an increase of 0.9%.
The coffee chain's stock has climbed by 5.66% in the past month, exceeding the Retail-Wholesale sector's gain of 0.77% and the S&P 500's gain of 1.27%.
Analysts and investors alike will be keeping a close eye on the performance of Starbucks in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.65, marking a 30% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $9.44 billion, indicating a 0.19% decline compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.4 per share and revenue of $38.27 billion, which would represent changes of +12.68% and +2.91%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Starbucks. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.04% lower. Right now, Starbucks possesses a Zacks Rank of #3 (Hold).
In terms of valuation, Starbucks is presently being traded at a Forward P/E ratio of 44.76. This denotes a premium relative to the industry average Forward P/E of 20.71.
We can also see that SBUX currently has a PEG ratio of 2.14. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Retail - Restaurants industry had an average PEG ratio of 1.97.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 23% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want 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).