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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 $489.11, moving +0.74% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.51%.

Prior to today's trading, shares of the warehouse club operator had gained 8.53% over the past month. This has outpaced the Retail-Wholesale sector's gain of 0.77% and the S&P 500's gain of 3.08% in that time.

COST will be looking to display strength as it nears its next earnings release. In that report, analysts expect COST to post earnings of $2.52 per share. This would mark year-over-year growth of 10.04%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $47.75 billion, up 10.52% from the year-ago period.

COST's full-year Zacks Consensus Estimates are calling for earnings of $11.90 per share and revenue of $211.93 billion. These results would represent year-over-year changes of +7.4% and +8.17%, respectively.

Investors might also notice 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.35% higher. COST currently has a Zacks Rank of #2 (Buy).

Investors should also note COST's current valuation metrics, including its Forward P/E ratio of 40.81. Its industry sports an average Forward P/E of 21.77, so we one might conclude that COST is trading at a premium comparatively.

It is also worth noting that COST currently has a PEG ratio of 4.77. 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 2.08 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 173, which puts it in the bottom 32% 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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