Photo by June Andrei George on Unsplash

In the latest trading session, Starbucks (SBUX) closed at $84.17, marking a -0.63% move from the previous day. This move was narrower than the S&P 500's daily loss of 1.72%. Meanwhile, the Dow lost 1.62%, and the Nasdaq, a tech-heavy index, added 0.09%.

Prior to today's trading, shares of the coffee chain had lost 3.08% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 8.48% and the S&P 500's loss of 9.09% in that time.

Wall Street will be looking for positivity from Starbucks as it approaches its next earnings report date. The company is expected to report EPS of $0.73, down 27% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.43 billion, up 3.47% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.88 per share and revenue of $32.27 billion, which would represent changes of -11.11% and +11.03%, respectively, from the prior year.

Any recent changes to analyst estimates for Starbucks should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 past month, the Zacks Consensus EPS estimate has moved 0.1% lower. Starbucks currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Starbucks currently has a Forward P/E ratio of 29.42. This valuation marks a premium compared to its industry's average Forward P/E of 18.89.

We can also see that SBUX currently has a PEG ratio of 2.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SBUX's industry had an average PEG ratio of 1.83 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 202, which puts it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

More By This Author: