Costco (COST) Gains While Market Falls: Market Facts
The most recent market close witnessed Costco (COST) positioned at an impressive $892.51, marking a positive change of +1.51% from the prior day’s ending trading session. Interestingly, this performance surpassed the S&P 500’s daily drop of 0.32%, even as the Dow increased by 0.16% and the tech-rich Nasdaq fell by 0.85%.
In the past month, Costco, a renowned warehouse club operator, has seen its stock grow by 7.54%, outperforming the Retail-Wholesale sector’s rise of 2.72% as well as the S&P 500’s gain of 1.52%.
Market watchers are poised to closely monitor Costco’s performance in light of its forthcoming earnings declaration. The company’s earnings report, scheduled for September 26, 2024, forecasts Costco to post earnings of $5.02 per share, marking a year-over-year growth of 3.29%. Meanwhile, revenue predictions currently stand at $80.07 billion, indicating a 1.44% growth compared to the same quarter in the previous year.
For the annual timeframe, the Zacks Consensus Estimates forecast earnings of $16.27 per share and a revenue of $254.55 billion, signifying gains of +10.76% and +5.06%, respectively, compared to last year.
Investors are also encouraged to observe any recent modifications to Costco’s analyst estimates, as these adjustments often mirror shifting short-term business trends. Consequently, positive adjustments may signal increased optimism regarding the company’s future prospects.
Zacks research also suggests that revisions in estimates directly influence near-term share price movements. To leverage such insights, the Zack’s Rank, a proprietary model that evaluates these changes and provides a practical rating framework.
Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), has an established reputation for outperformance, yielding an average yearly return of +25% since 1988 as externally audited. Currently, Costco holds a Zacks Rank of #3 (Hold), with the Zacks Consensus EPS estimate moving 0.1% higher over the past month.
In terms of valuation, Costco currently trades at a Forward P/E ratio of 54.03, marking a premium compared to its industry’s Forward P/E of 22.43.
Additionally, investors should remember that COST holds a PEG ratio of 5.79. This ratio is similar to the commonly used P/E ratio but also includes the company’s expected earnings growth. Compared to the closing prices of yesterday, Retail – Discount Stores stocks hold an average PEG ratio of 2.36.
The Retail – Discount Stores industry forms part of the larger Retail-Wholesale sector, and with a Zacks Industry Rank of 179, it ranks in the bottom 30% of all 250+ industries.
The Zacks Industry Rank measures the strength of individual industry groups and it’s calculated based on the average Zacks Rank of the stocks within these groups. Zacks research indicates that the top 50% rated industries notably outperform the bottom half by a factor of 2 to 1.
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