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Starbucks (SBUX) Gains But Lags Market: What You Should Know

In the latest trading session, Starbucks (SBUX) closed at $113.86, marking a +0.33% move from the previous day.

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This story originally appeared on Zacks

Starbucks (SBUX) closed the most recent trading day at $113.86, moving +0.33% from the previous trading session. This move lagged the S&P 500's daily gain of 0.37%.

- Zacks

Prior to today's trading, shares of the coffee chain had gained 1.13% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.05% and lagged the S&P 500's gain of 2.13% in that time.

SBUX will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2021. The company is expected to report EPS of $1, up 96.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.26 billion, up 33.21% from the year-ago period.

Any recent changes to analyst estimates for SBUX should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate has moved 0.12% lower within the past month. SBUX is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that SBUX has a Forward P/E ratio of 30.51 right now. This represents a premium compared to its industry's average Forward P/E of 21.66.

It is also worth noting that SBUX currently has a PEG ratio of 1.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants was holding an average PEG ratio of 2.34 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.



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