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Costco (COST) Outpaces Stock Market Gains: What You Should Know

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Costco (COST - Free Report) closed at $443.19 in the latest trading session, marking a +1.87% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.6%.

Heading into today, shares of the warehouse club operator had gained 7.5% over the past month, outpacing the Retail-Wholesale sector's loss of 2.28% and the S&P 500's gain of 1.21% 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 September 23, 2021. In that report, analysts expect COST to post earnings of $3.38 per share. This would mark year-over-year growth of 7.99%. Our most recent consensus estimate is calling for quarterly revenue of $60.08 billion, up 12.55% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.48 per share and revenue of $193.15 billion. These totals would mark changes of +18.42% and +15.82%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for COST. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. COST is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, COST is holding a Forward P/E ratio of 41.49. For comparison, its industry has an average Forward P/E of 24.55, which means COST is trading at a premium to the group.

We can also see that COST currently has a PEG ratio of 4.54. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 2.04 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 94, putting it in the top 38% 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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