Here's Why Starbucks (SBUX) is a Strong Value Stock
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.
Starbucks (SBUX)
Founded in 1985 and based in Seattle, WA, Starbucks Corporation is the leading roaster and retailer of specialty coffee globally. In addition to fresh, rich-brewed coffees, Starbucks’ offerings include many complimentary food items and a selection of premium teas and other beverages, sold mainly through the company’s retail stores. The company’s popular brands include Starbucks coffee, Teavana tea, Seattle's Best Coffee, La Boulange bakery products and Evolution Fresh juices.
SBUX is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 22.6X for the current fiscal year compared to the Retail - Restaurants industry's P/E of 19.4X. Additionally, SBUX has a PEG Ratio of 1.4 and a Price/Cash Flow ratio of 19.4X. Value investors should also note SBUX's Price/Sales ratio of 3X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Six analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.02 to $4.14 per share. SBUX has an average earnings surprise of 6.9%.
Investors should take the time to consider SBUX for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.
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Starbucks Corporation (SBUX) : Free Stock Analysis Report
