The most recent trading session ended with Starbucks (SBUX) standing at $95.72, reflecting a -1.39% shift from the previouse trading day's closing. This change lagged the S&P 500's 1.77% gain on the day. Meanwhile, the Dow gained 1.42%, and the Nasdaq, a tech-heavy index, added 2.28%.
Shares of the coffee chain witnessed a loss of 13.14% over the previous month, trailing the performance of the Retail-Wholesale sector with its loss of 7.57% and the S&P 500's loss of 5.73%.
Market participants will be closely following the financial results of Starbucks in its upcoming release. The company is predicted to post an EPS of $0.52, indicating a 23.53% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $8.88 billion, indicating a 3.65% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates project earnings of $2.99 per share and a revenue of $37.42 billion, demonstrating changes of -9.67% and +3.45%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Starbucks. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. Starbucks presently features a Zacks Rank of #3 (Hold).
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 32.45. This indicates a premium in contrast to its industry's Forward P/E of 22.67.
We can also see that SBUX currently has a PEG ratio of 3.07. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Restaurants industry had an average PEG ratio of 2.14 as trading concluded yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 154, placing it within the bottom 39% 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.
To follow SBUX in the coming trading sessions, be sure to utilize Zacks.com.
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Starbucks Corporation (SBUX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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