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Costco (COST) Dips More Than Broader Markets: What You Should Know

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Costco (COST - Free Report) closed the most recent trading day at $210.51, moving -0.06% from the previous trading session. This change lagged the S&P 500's 0.02% loss on the day. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq lost 0.21%.

Prior to today's trading, shares of the warehouse club operator had lost 7.01% over the past month. This has lagged the Retail-Wholesale sector's loss of 0.15% and the S&P 500's loss of 1.4% in that time.

Wall Street will be looking for positivity from COST as it approaches its next earnings report date. This is expected to be March 6, 2019. The company is expected to report EPS of $1.65, up 16.2% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $35.48 billion, up 7.54% from the year-ago period.

COST's full-year Zacks Consensus Estimates are calling for earnings of $7.66 per share and revenue of $152.94 billion. These results would represent year-over-year changes of +12.15% and +8.03%, respectively.

Investors might also notice recent changes to analyst estimates for COST. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.94% lower. COST is currently a Zacks Rank #3 (Hold).

Digging into valuation, COST currently has a Forward P/E ratio of 27.51. Its industry sports an average Forward P/E of 19.4, so we one might conclude that COST is trading at a premium comparatively.

Also, we should mention that COST has a PEG ratio of 2.75. 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 Retail - Discount Stores was holding an average PEG ratio of 1.55 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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