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

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Costco (COST - Free Report) closed the most recent trading day at $465.94, moving +0.05% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.46%.

Prior to today's trading, shares of the warehouse club operator had gained 4.82% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.25% and the S&P 500's gain of 1.93% in that time.

Investors will be hoping for strength from COST as it approaches its next earnings release, which is expected to be September 23, 2021. The company is expected to report EPS of $3.50, up 11.82% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $62.81 billion, up 17.66% from the year-ago period.

It is also important to note the recent changes to analyst estimates for COST. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 0.72% higher. COST is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, COST is currently trading at a Forward P/E ratio of 40.64. For comparison, its industry has an average Forward P/E of 22.88, which means COST is trading at a premium to the group.

Also, we should mention that COST has a PEG ratio of 4.37. 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. The Retail - Discount Stores was holding an average PEG ratio of 1.94 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 180, which puts it in the bottom 30% 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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