Costco (COST) Experiences a Notable Decline Compared to the Market

Costco (COST) recently wrapped up the trading day with its stock priced at $919.75, reflecting a slight decrease of -0.41% compared to the previous session. This dip is more pronounced when considering the performance of major market indices; for example, the S&P 500 recorded a modest loss of 0.21%, while the Dow Jones fell by 0.16%, and the Nasdaq, which is heavily weighted with technology stocks, saw a steeper drop of 0.89%.

In the month leading up to this trading day, Costco shares have seen a decline of 4.27%, which surpasses the losses experienced by the Retail-Wholesale sector (which fell by 2.84%) and the broader S&P 500 index, down by 1.56%.

Upcoming Earnings Report

Investors and analysts are particularly focused on the upcoming earnings report from Costco. Forecasts suggest that the company is likely to announce earnings of $4.07 per share, which would signify a year-over-year growth rate of 9.7%. Additionally, revenue projections for this quarter are estimated at $62.85 billion, indicating a 7.55% increase compared to the same quarter last year.

For the entire fiscal year, the consensus among analysts implies expected earnings of $18.01 per share and total revenues of $272.79 billion. When compared to last year's figures, this would result in an increase of 11.79% for earnings and 7.21% for revenues.

Analyst Sentiment

Investors should pay attention to any recent adjustments in analyst projections regarding Costco. Such changes usually reflect shifts in expected business trends. Notably, if analysts increase their earnings estimates, it can be an indicator of confidence in Costco's operational performance and profit generation capabilities.

Research indicates a strong correlation between these estimate adjustments and subsequent stock performance. To assist investors, the Zacks Rank system has been developed, which categorizes these estimates and provides an actionable rating framework.

This system ranges from #1 (Strong Buy) to #5 (Strong Sell) and has a historical record of significant outperformance; notably, #1-rated stocks have yielded an average annual return of +25% since 1988. In the last month, the consensus EPS estimate for Costco has slightly risen by 0.25%. Currently, Costco holds a Zacks Rank of #2 (Buy).

Valuation Overview

From a valuation perspective, Costco's Forward P/E ratio stands at 51.28, significantly higher than the industry average Forward P/E of 20.35. This suggests that Costco is trading at a premium in comparison to its peers.

Additionally, Costco's PEG ratio is currently 5.51, which factors in the company's expected earnings growth along with its price-to-earnings metric. In contrast, the Retail - Discount Stores industry shows an average PEG ratio of 2.24.

Industry Insights

The Retail - Discount Stores industry falls within the broader Retail-Wholesale sector, which currently has a Zacks Industry Rank of 58, placing it in the top 24% of over 250 industries evaluated. The Zacks Industry Rank is a comparative measure, ordering industries based on their average Zacks Rank. Historical data have shown that the top half of rated industries tend to outperform those rated lower by a factor of 2 to 1.

For ongoing updates on Costco ( COST ) and its performance, investors should stay informed through reliable financial news sources.

Costco, Earnings, Stock