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Costco (COST) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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In the latest trading session, Costco (COST - Free Report) closed at $940.25, marking a -1.33% move from the previous day. The stock's change was less than the S&P 500's daily loss of 0.43%. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw a decrease of 0.94%.

Shares of the warehouse club operator witnessed a gain of 10.5% over the previous month, beating the performance of the Retail-Wholesale sector with its gain of 4.04%, and the S&P 500's gain of 0.89%.

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 $4.51, marking a 12.19% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $68.9 billion, reflecting a 8.13% rise from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $20.15 per share and a revenue of $296.77 billion, indicating changes of +12.01% and +7.82%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Costco. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.28% higher within the past month. Right now, Costco possesses a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Costco has a Forward P/E ratio of 47.3 right now. This expresses a premium compared to the average Forward P/E of 28.83 of its industry.

It is also worth noting that COST currently has a PEG ratio of 5.7. 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 average PEG ratio for the Retail - Discount Stores industry stood at 3.09 at the close of the market yesterday.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 16, placing it within the top 7% of over 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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