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Costco (COST) Stock Drops Despite Market Gains: Important Facts to Note

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Costco (COST - Free Report) closed the most recent trading day at $793, moving -0.35% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.09%. Elsewhere, the Dow saw a downswing of 0.49%, while the tech-heavy Nasdaq appreciated by 0.65%.

Coming into today, shares of the warehouse club operator had gained 12.16% in the past month. In that same time, the Retail-Wholesale sector gained 5.59%, while the S&P 500 gained 5.78%.

The investment community will be closely monitoring the performance of Costco in its forthcoming earnings report. The company is scheduled to release its earnings on May 30, 2024. The company is forecasted to report an EPS of $3.70, showcasing a 7.87% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $58 billion, indicating an 8.12% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $16.04 per share and revenue of $253.52 billion, which would represent changes of +9.19% and +4.63%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Costco. 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.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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.

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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.12% upward. As of now, Costco holds a Zacks Rank of #3 (Hold).

In the context of valuation, Costco is at present trading with a Forward P/E ratio of 49.63. This signifies a premium in comparison to the average Forward P/E of 21.01 for its industry.

It's also important to note that COST currently trades at a PEG ratio of 5.24. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Retail - Discount Stores industry was having an average PEG ratio of 1.88.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 95, positioning it in the top 38% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply to follow these and more stock-moving metrics during the upcoming trading sessions.

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