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Costco (COST) Stock Falls Amid Market Uptick: What Investors Need to Know

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The most recent trading session ended with Costco (COST - Free Report) standing at $552.44, reflecting a -0.44% shift from the previouse trading day's closing. This move lagged the S&P 500's daily gain of 0.65%. On the other hand, the Dow registered a gain of 0.38%, and the technology-centric Nasdaq increased by 0.48%.

Shares of the warehouse club operator have depreciated by 2.88% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 0.65% and the S&P 500's loss of 2.79%.

Market participants will be closely following the financial results of Costco in its upcoming release. It is anticipated that the company will report an EPS of $3.43, marking a 10.65% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $57.85 billion, indicating a 6.27% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $15.74 per share and a revenue of $253.5 billion, representing changes of +7.15% and +4.63%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Costco. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.27% higher within the past month. Costco currently has a Zacks Rank of #2 (Buy).

Investors should also note Costco's current valuation metrics, including its Forward P/E ratio of 35.26. This expresses a premium compared to the average Forward P/E of 20.68 of its industry.

Investors should also note that COST has a PEG ratio of 4.12 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Discount Stores industry stood at 2.13 at the close of the market yesterday.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 95, putting it in the top 38% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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