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Costco (COST) Gains But Lags Market: What You Should Know

Costco (COST) closed at $539.82 in the latest trading session, marking a +0.75% move from the prior day. This change lagged the S&P 500's 2.13% gain on the day. Meanwhile, the Dow gained 1.63%, and the Nasdaq, a tech-heavy index, added 0.3%.

Coming into today, shares of the warehouse club operator had gained 9.22% in the past month. In that same time, the Retail-Wholesale sector gained 7.16%, while the S&P 500 gained 5.84%.

Wall Street will be looking for positivity from Costco as it approaches its next earnings report date. This is expected to be September 22, 2022. The company is expected to report EPS of $4.09, up 4.87% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $71.21 billion, up 13.61% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.10 per share and revenue of $226.07 billion. These totals would mark changes of +18.23% and +15.38%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Costco. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.05% higher within the past month. Costco is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that Costco has a Forward P/E ratio of 40.91 right now. This valuation marks a premium compared to its industry's average Forward P/E of 20.74.

Investors should also note that COST has a PEG ratio of 4.46 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 99, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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

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