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Starbucks (SBUX) Increases Despite Market Slip: Here's What You Need to Know

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Starbucks (SBUX - Free Report) ended the recent trading session at $94.18, demonstrating a +0.57% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.01%. Elsewhere, the Dow saw an upswing of 0.04%, while the tech-heavy Nasdaq depreciated by 0.25%.

Shares of the coffee chain have depreciated by 3.21% over the course of the past month, outperforming the Retail-Wholesale sector's loss of 4.66% and lagging the S&P 500's loss of 1.6%.

The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company is slated to reveal its earnings on November 2, 2023. The company's upcoming EPS is projected at $0.96, signifying a 18.52% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $9.23 billion, indicating a 9.74% growth compared to the corresponding quarter of the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Starbucks. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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, the Zacks Consensus EPS estimate has shifted 0.28% downward. Starbucks is currently a Zacks Rank #3 (Hold).

Looking at valuation, Starbucks is presently trading at a Forward P/E ratio of 23.09. This indicates a premium in contrast to its industry's Forward P/E of 19.16.

Investors should also note that SBUX has a PEG ratio of 1.4 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.58 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within 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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