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

Zacks Equity Research
·3 min read

In the latest trading session, Costco (COST) closed at $375.75, marking a -0.55% move from the previous day. This change lagged the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.54%, while the tech-heavy Nasdaq added 0.19%.

Heading into today, shares of the warehouse club operator had gained 9.63% over the past month, outpacing the Retail-Wholesale sector's gain of 7.84% and the S&P 500's gain of 4.79% in that time.

Wall Street will be looking for positivity from COST as it approaches its next earnings report date. In that report, analysts expect COST to post earnings of $1.97 per share. This would mark year-over-year growth of 13.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $41.61 billion, up 12.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.60 per share and revenue of $180.29 billion, which would represent changes of +8.47% and +8.11%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for COST. Recent revisions tend to reflect the latest near-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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 1.66% higher. COST currently has a Zacks Rank of #3 (Hold).

Digging into valuation, COST currently has a Forward P/E ratio of 39.37. This represents a premium compared to its industry's average Forward P/E of 22.74.

Investors should also note that COST has a PEG ratio of 4.64 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. COST's industry had an average PEG ratio of 3.15 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 187, which puts it in the bottom 27% 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 Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
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