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Costco (COST) Stock Sinks As Market Gains: What You Should Know

·3 min read

Costco (COST) closed the most recent trading day at $529.12, moving -0.1% from the previous trading session. This change lagged the S&P 500's daily gain of 0.66%. Elsewhere, the Dow gained 0.61%, while the tech-heavy Nasdaq added 0.05%.

Heading into today, shares of the warehouse club operator had lost 1.89% over the past month, outpacing the Retail-Wholesale sector's loss of 2.55% and the S&P 500's loss of 3.79% in that time.

Investors will be hoping for strength from Costco as it approaches its next earnings release, which is expected to be September 22, 2022. In that report, analysts expect Costco to post earnings of $4.11 per share. This would mark year-over-year growth of 5.38%. Our most recent consensus estimate is calling for quarterly revenue of $71.84 billion, up 14.63% from the year-ago period.

Investors might also notice recent changes to analyst estimates for Costco. 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.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.39% higher. Costco currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Costco is holding a Forward P/E ratio of 36.82. This represents a premium compared to its industry's average Forward P/E of 21.28.

We can also see that COST currently has a PEG ratio of 3.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. COST's industry had an average PEG ratio of 2.08 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 219, which puts it in the bottom 14% 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.

To follow COST in the coming trading sessions, be sure to utilize Zacks.com.


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