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

Starbucks (SBUX - Free Report) finished the most recent trading day at $97.66, reflecting a rise of +0.87% from its previous closing price. This increase stands in contrast to the overall market performance, where the S&P 500 dropped by 0.92%. Similarly, other major indexes also saw declines, with the Dow down by 0.96% and the tech-heavy Nasdaq falling by 1.6%.

Over the past month, Starbucks' stock has shown a growth of 2.51%, which is higher than the Retail-Wholesale sector's gain of 1.69%. However, it falls short of the S&P 500's increase of 2.68% during the same period.

As Starbucks approaches its upcoming earnings report, investors are keeping a keen eye on its forthcoming performance. The company is set to release its financial results on October 30, 2024. Analysts are predicting an earnings per share (EPS) of $1.03, which represents a decline of 2.83% compared to the same quarter last year. Moreover, the consensus estimate for revenue stands at $9.33 billion, indicating a slight decrease of 0.49% year-over-year.

In this context, it is crucial for investors to observe any recent adjustments in analyst forecasts for Starbucks. Changes in estimates can often reflect shifts in business conditions. Positive revisions in estimates may suggest optimism about the brand's future performance.

Research indicates that modifications in earnings estimates have a direct correlation with upcoming stock price movements. Investors can leverage this information through tools like the Zacks Rank, which provides a straightforward rating system based on estimate fluctuations.

The Zacks Rank ranges from #1 (Strong Buy) to #5 (Strong Sell) and has demonstrated a consistent ability to outperform the market, as shown by third-party evaluations. Notably, stocks rated #1 have yielded an average annual return of +25% since 1988. In the previous 30 days, the Zacks Consensus EPS estimate for Starbucks has declined by 2.25%, resulting in a current Zacks Rank of #4 (Sell).

From a valuation perspective, Starbucks is currently trading with a Forward P/E ratio of 25.18, which is above the industry average Forward P/E of 22.89. It's also noteworthy that SBUX has a PEG ratio of 2.14, which takes into account the expected growth rate of earnings. In comparison, the average PEG ratio for the Retail - Restaurants sector is 2.17 based on the latest closing figures.

The Retail - Restaurants industry is a component of the broader Retail-Wholesale sector, boasting a Zacks Industry Rank of 100, placing it within the top 40% of over 250 industries.

The Zacks Industry Rank assesses the strength of individual industry groups by calculating the average Zacks Rank among their constituent stocks. Research indicates that industries rated in the upper 50% consistently outperform those in the lower half twofold.

Investors are encouraged to use resources such as Zacks.com to track these stock-moving indicators and stay informed in the upcoming trading sessions.

Starbucks, Stocks, Earnings