Costco (COST) closed the most recent trading day at $961.85, moving +1.29% from the previous trading session. The stock’s change was more than the S&P 500’s daily gain of 0.65%. Meanwhile, the Dow experienced a rise of 0.13%, and the technology-dominated Nasdaq saw an increase of 0.81%.
Shares of the warehouse club operator have appreciated by 3.6% over the course of the past month, underperforming the Retail-Wholesale sector’s gain of 4.78%, and outperforming the S&P 500’s gain of 2.38%.
Market participants will be closely following the financial results of Costco in its upcoming release. On that day, Costco is projected to report earnings of $6.51 per share, which would represent year-over-year growth of 10.9%. Alongside, our most recent consensus estimate is anticipating revenue of $94.46 billion, indicating a 9.64% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $20.42 per share and a revenue of $301.94 billion, demonstrating changes of +13.51% and +9.7%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Costco. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.2% higher. Costco is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Costco has a Forward P/E ratio of 46.49 right now. This denotes a premium relative to the industry average Forward P/E of 29.42.
One should further note that COST currently holds a PEG ratio of 4.52. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The average PEG ratio for the Retail – Discount Stores industry stood at 2.78 at the close of the market yesterday.
