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Why the Market Dipped But Costco (COST) Gained Today

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The latest trading session saw Costco (COST - Free Report) ending at $599.08, denoting a +0.47% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a loss of 0.54% for the day. Meanwhile, the Dow experienced a drop of 0.11%, and the technology-dominated Nasdaq saw a decrease of 0.84%.

The warehouse club operator's stock has climbed by 6.3% in the past month, falling short of the Retail-Wholesale sector's gain of 7.8% and the S&P 500's gain of 8.62%.

Investors will be eagerly watching for the performance of Costco in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on December 14, 2023. The company is forecasted to report an EPS of $3.44, showcasing a 10.97% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $57.54 billion, indicating a 5.69% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.71 per share and a revenue of $252.2 billion, signifying shifts of +6.94% and +4.09%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Costco. These recent revisions tend to reflect the evolving nature of short-term business trends. 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 exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.14% lower. At present, Costco boasts a Zacks Rank of #3 (Hold).

Investors should also note Costco's current valuation metrics, including its Forward P/E ratio of 37.94. This indicates a premium in contrast to its industry's Forward P/E of 23.74.

We can additionally observe that COST currently boasts a PEG ratio of 4.44. 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 average PEG ratio for the Retail - Discount Stores industry stood at 2.11 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 93, putting it in the top 37% 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 to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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