Back to top

Image: Bigstock

Costco (COST) to Post Q4 Earnings: What Factors Are at Play?

Read MoreHide Full Article

Costco Wholesale Corporation (COST - Free Report) is slated to report fourth-quarter fiscal 2017 results on Oct 5. In the preceding quarter, the company outperformed the Zacks Consensus Estimate by 6.9%. Let’s see how things are shaping up prior to this announcement.

Investors are keeping their fingers crossed and hoping for a positive earnings surprise from Costco in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is $2.01, reflecting a year-over-year increase of over 13%. We observe that the Zacks Consensus Estimate has remained stable in the past 30 days. Analysts polled by Zacks expect revenues of $41,739 million, up 14% from the year-ago quarter.

Model Predicts Lower Probability

Our proven model does not conclusively show that Costco is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Costco has an Earnings ESP of -0.73%. Notably, the company carries a Zacks Rank #2, which increases the predictive power. However, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Costco Wholesale Corporation Price, Consensus and EPS Surprise

 

Costco Wholesale Corporation Price, Consensus and EPS Surprise | Costco Wholesale Corporation Quote

Factors at Play

Costco continues to be one of the dominant retail wholesalers based on its scale and quality of merchandise offered. A differentiated product range enables the company to ensure an upscale shopping experience for its members, resulting in market share gains. Moreover, Costco continues to maintain a healthy membership renewal rate. Further, it is gradually expanding e-commerce capabilities in the United States, Canada, U.K., Mexico, Taiwan and Korea. We are also encouraged by the company’s expansion strategy, as it remains committed to opening new clubs in the domestic and international markets. However, stiff competition and cautious consumer spending remain causes of concern.

3 Stocks with High Probability to Beat Estimate

Here are three stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Constellation Brands, Inc. (STZ - Free Report) has an Earnings ESP of +0.53% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Procter & Gamble Company (PG - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #2.

Yum! Brands, Inc. (YUM - Free Report) has an Earnings ESP of +5.39% and a Zacks Rank #3.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Published in