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

On the latest trading day, Starbucks (SBUX - Free Report) closed at $97.66, reflecting a +0.87% increase from its previous close. This positive movement comes while broader markets experienced losses, with the S&P 500 dropping by 0.92%. In comparison, the Dow Jones Industrial Average fell by 0.96%, and the Nasdaq Composite lost 1.6%.

Over the past month, Starbucks' stock has risen by 2.51%, outperforming the Retail-Wholesale sector's growth of 1.69%. However, it has slightly lagged behind the S&P 500's 2.68% increase during the same period.

Looking forward, investors will be closely watching Starbucks during its upcoming earnings report, set for October 30, 2024. Analysts anticipate earnings per share (EPS) of $1.03, which would represent a 2.83% decline compared to the same period last year. Revenue is projected to reach $9.33 billion, showing a slight decrease of 0.49% from the prior year.

It is also important for investors to keep an eye on any recent changes to analyst estimates for the company, as these shifts often reflect evolving business trends. Positive updates in estimates can indicate a brighter business outlook for Starbucks.

Research indicates that changes in estimates are often closely tied to stock performance. Investors might utilize the Zacks Rank system, which evaluates estimate changes and provides actionable ratings. The Zacks Rank spans from #1 (Strong Buy) to #5 (Strong Sell) and has a proven track record of performance, with #1 rated stocks yielding an average annual return of +25% since 1988. Currently, Starbucks holds a Zacks Rank of #4 (Sell), indicating some caution.

In terms of valuation, Starbucks is trading at a Forward Price-to-Earnings (P/E) ratio of 25.18, which is higher than the industry average Forward P/E ratio of 22.89.

Additionally, Starbucks has a PEG ratio of 2.14. This ratio, akin to the P/E ratio, adjusts for the company’s anticipated earnings growth rate. For context, stocks in the Retail - Restaurants sector typically feature a PEG ratio of 2.17 based on recent closing prices.

The Retail - Restaurants segment is part of the Retail-Wholesale sector and boasts a Zacks Industry Rank of 100, placing it in the top 40% of over 250 industries tracked. This ranking evaluates the strength of individual industries based on the average Zacks Rank of their constituent stocks, revealing that top-rated industries often outperform lower-rated ones by a substantial margin.

Investors should stay informed about these stock-related metrics and developments in the upcoming trading sessions.

Starbucks, Stocks, Market