Costco (COST) ended the recent trading session at $919.75, demonstrating a -0.41% swing from the preceding day's closing price. This change lagged the S&P 500's 0.21% loss on the day. Meanwhile, the Dow experienced a drop of 0.16%, and the technology-dominated Nasdaq saw a decrease of 0.89%.
Coming into today, shares of the warehouse club operator had lost 4.27% in the past month. In that same time, the Retail-Wholesale sector lost 2.84%, while the S&P 500 lost 1.56%.
Analysts and investors alike will be keeping a close eye on the performance of Costco in its upcoming earnings disclosure. On that day, Costco is projected to report earnings of $4.07 per share, which would represent year-over-year growth of 9.7%. At the same time, our most recent consensus estimate is projecting a revenue of $62.85 billion, reflecting a 7.55% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $18.01 per share and revenue of $272.79 billion. These totals would mark changes of +11.79% and +7.21%, respectively, from last year.
Any recent changes to analyst estimates for Costco should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 shifted 0.25% upward. At present, Costco boasts a Zacks Rank of #2 (Buy).
Looking at its valuation, Costco is holding a Forward P/E ratio of 51.28. Its industry sports an average Forward P/E of 20.35, so one might conclude that Costco is trading at a premium comparatively.
Investors should also note that COST has a PEG ratio of 5.51 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Retail - Discount Stores industry held an average PEG ratio of 2.24.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 58, putting it in the top 24% 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.
To follow COST in the coming trading sessions, be sure to utilize Zacks.com.
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