Starbucks(US:SBUX) ZACKS·2025-12-31 23:45Core Viewpoint - Starbucks is facing challenges with a projected decline in earnings per share (EPS) and a mixed performance compared to the broader market, indicating potential concerns for investors [1][2][5]. Financial Performance - Starbucks ended the recent trading session at $84.21, reflecting a -1.22% change from the previous day's closing price, underperforming the S&P 500's daily loss of 0.74% [1]. - The company is expected to report an EPS of $0.59, down 14.49% from the prior-year quarter, while net sales are projected at $9.65 billion, up 2.65% from the year-ago period [2]. - For the entire fiscal year, earnings are estimated at $2.35 per share and revenue at $38.39 billion, indicating increases of +10.33% and +3.24%, respectively, from the previous year [3]. Analyst Estimates and Ratings - Recent revisions to analyst estimates for Starbucks have shown a decrease of 3.01% in the Zacks Consensus EPS estimate over the past month, leading to a Zacks Rank of 5 (Strong Sell) [5]. - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong historical performance, with 1 stocks averaging an annual return of +25% since 1988 [5]. Valuation Metrics - Starbucks is currently trading at a Forward P/E ratio of 36.34, significantly higher than the industry average of 19.8, indicating a premium valuation [6]. - The company holds a PEG ratio of 1.77, which is lower than the average PEG ratio of 2.3 for the Retail - Restaurants sector [7]. Industry Context - The Retail - Restaurants industry is ranked 212 in the Zacks Industry Rank, placing it in the bottom 15% of over 250 industries, suggesting underperformance relative to other sectors [7][8].