Back to top

Image: Bigstock

Costco (COST) Stock Falls Amid Market Uptick: What Investors Need to Know

Read MoreHide Full Article

Costco (COST - Free Report) closed the most recent trading day at $551.84, moving -0.08% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.73%. Meanwhile, the Dow gained 0.62%, and the Nasdaq, a tech-heavy index, added 0.93%.

The warehouse club operator's shares have seen a decrease of 1.13% over the last month, surpassing the Retail-Wholesale sector's loss of 3.41% and the S&P 500's loss of 2.29%.

Market participants will be closely following the financial results of Costco in its upcoming release. The company's earnings per share (EPS) are projected to be $3.43, reflecting a 10.65% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $57.85 billion, indicating a 6.26% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.73 per share and a revenue of $253.5 billion, indicating changes of +7.08% and +4.63%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Costco. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 2.14% increase. Costco currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Costco is holding a Forward P/E ratio of 35.12. For comparison, its industry has an average Forward P/E of 20.59, which means Costco is trading at a premium to the group.

Also, we should mention that COST has a PEG ratio of 4.1. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Discount Stores was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 162, finds itself in the bottom 36% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Costco Wholesale Corporation (COST) - free report >>

Published in