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Costco (COST) Gains As Market Dips: What You Should Know

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Costco (COST - Free Report) closed at $222.42 in the latest trading session, marking a +1.94% move from the prior day. This change outpaced the S&P 500's 0.66% loss on the day. Elsewhere, the Dow lost 0.99%, while the tech-heavy Nasdaq lost 1.63%.

Prior to today's trading, shares of the warehouse club operator had lost 6.76% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 12.76% and the S&P 500's loss of 8.1% in that time.

Wall Street will be looking for positivity from COST as it approaches its next earnings report date. This is expected to be December 13, 2018. The company is expected to report EPS of $1.60, up 17.65% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $34.24 billion, up 7.66% from the prior-year quarter.

COST's full-year Zacks Consensus Estimates are calling for earnings of $7.70 per share and revenue of $151.89 billion. These results would represent year-over-year changes of +12.74% and +7.28%, respectively.

Investors should also note any recent changes to analyst estimates for COST. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.29% lower. COST is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, COST is holding a Forward P/E ratio of 28.34. For comparison, its industry has an average Forward P/E of 21.61, which means COST is trading at a premium to the group.

Investors should also note that COST has a PEG ratio of 2.78 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Discount Stores was holding an average PEG ratio of 1.66 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 48, which puts it in the top 19% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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