In the latest trading session, Costco (COST) closed at $539.65, marking a +1.1% move from the previous day. This change outpaced the S&P 500’s 0.46% loss on the day. At the same time, the Dow lost 0.7%, and the tech-heavy Nasdaq lost 0.68%.
Coming into today, shares of the warehouse club operator had gained 10.75% in the past month. In that same time, the Retail-Wholesale sector gained 2.35%, while the S&P 500 gained 4.05%.
Investors will be hoping for strength from Costco as it approaches its next earnings release, which is expected to be December 9, 2021. On that day, Costco is projected to report earnings of $2.59 per share, which would represent year-over-year growth of 13.1%. Meanwhile, our latest consensus estimate is calling for revenue of $49.61 billion, up 14.82% from the prior-year quarter.
COST’s full-year Zacks Consensus Estimates are calling for earnings of $12.15 per share and revenue of $214.79 billion. These results would represent year-over-year changes of +9.66% and +9.63%, respectively.
It is also important to note the recent changes to analyst estimates for Costco. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.14% higher. Costco is currently sporting a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Costco is currently trading at a Forward P/E ratio of 43.92. This valuation marks a premium compared to its industry’s average Forward P/E of 24.24.
It is also worth noting that COST currently has a PEG ratio of 5.08. 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. Retail – Discount Stores stocks are, on average, holding a PEG ratio of 2.34 based on yesterday’s closing prices.
The Retail – Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 36% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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