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Costco (COST) Likely to Beat Q2 Earnings: Stock to Gain?
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Costco Wholesale Corporation (COST - Free Report) is slated to report second-quarter fiscal 2017 results on Mar 2, 2017. In the preceding quarter, the company underperformed the Zacks Consensus Estimate by 1.7%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is, whether Costco will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is $1.35, reflecting a year-over-year increase of about 8.9%. We observe that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $29,954 million, up 6.3% from the year-ago quarter.
Costco forms part of the Retail-Wholesale sector. As per the latest Earnings Preview, total earnings for the sector are expected to decline marginally by 1.2%, however, revenue is projected to improve 4.7%. We noted that the Retail-Wholesale sector has lagged the broader market in the past three months. In the said time frame this Zacks categorized sector gained 3.7%, while S&P 500 index advanced 7.3%.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco continues to be one of the dominant retail wholesalers based on its scale and quality of merchandise offered. A differentiated product range enables the company to ensure an upscale shopping experience for its members, resulting in market share gains. Moreover, Costco continues to maintain a healthy membership renewal rate. Further, the company is gradually expanding eCommerce capabilities in the U.S., Canada, U.K., Mexico, Taiwan and Korea. We are also encouraged by its expansion strategy, as it remains committed to opening new clubs in the domestic and international markets. However, investors are worried about Costco’s top-line performance that had missed the Zacks Consensus Estimate in the last eight consecutive quarters.
What Does the Zacks Model Unveil?
Our proven model shows that Costco is likely to beat earnings estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco has an Earnings ESP of +0.74% as the Most Accurate estimate stands at $1.36 and the Zacks Consensus Estimate is pegged lower at $1.35. So the ensuing positive Earnings ESP and a Zacks Rank #3 make us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank #3.
Fred's, Inc. has an Earnings ESP of +15.79% and a Zacks Rank #3.
Staples, Inc. has an Earnings ESP of + 4.00% and a Zacks Rank #3.
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Costco (COST) Likely to Beat Q2 Earnings: Stock to Gain?
Costco Wholesale Corporation (COST - Free Report) is slated to report second-quarter fiscal 2017 results on Mar 2, 2017. In the preceding quarter, the company underperformed the Zacks Consensus Estimate by 1.7%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is, whether Costco will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is $1.35, reflecting a year-over-year increase of about 8.9%. We observe that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $29,954 million, up 6.3% from the year-ago quarter.
Costco forms part of the Retail-Wholesale sector. As per the latest Earnings Preview, total earnings for the sector are expected to decline marginally by 1.2%, however, revenue is projected to improve 4.7%. We noted that the Retail-Wholesale sector has lagged the broader market in the past three months. In the said time frame this Zacks categorized sector gained 3.7%, while S&P 500 index advanced 7.3%.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation Price, Consensus and EPS Surprise | Costco Wholesale Corporation Quote
Factors at Play
Costco continues to be one of the dominant retail wholesalers based on its scale and quality of merchandise offered. A differentiated product range enables the company to ensure an upscale shopping experience for its members, resulting in market share gains. Moreover, Costco continues to maintain a healthy membership renewal rate. Further, the company is gradually expanding eCommerce capabilities in the U.S., Canada, U.K., Mexico, Taiwan and Korea. We are also encouraged by its expansion strategy, as it remains committed to opening new clubs in the domestic and international markets. However, investors are worried about Costco’s top-line performance that had missed the Zacks Consensus Estimate in the last eight consecutive quarters.
What Does the Zacks Model Unveil?
Our proven model shows that Costco is likely to beat earnings estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco has an Earnings ESP of +0.74% as the Most Accurate estimate stands at $1.36 and the Zacks Consensus Estimate is pegged lower at $1.35. So the ensuing positive Earnings ESP and a Zacks Rank #3 make us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank #3.
Fred's, Inc. has an Earnings ESP of +15.79% and a Zacks Rank #3.
Staples, Inc. has an Earnings ESP of + 4.00% and a Zacks Rank #3.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>