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Costco (COST) Stock Sinks As Market Gains: What You Should Know

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Costco (COST - Free Report) closed at $299.05 in the latest trading session, marking a -0.09% move from the prior day. This change lagged the S&P 500's 0.75% gain on the day. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.32%.

Prior to today's trading, shares of the warehouse club operator had gained 0.76% over the past month. This has outpaced the Retail-Wholesale sector's gain of 0.59% and lagged the S&P 500's gain of 3.42% in that time.

COST will be looking to display strength as it nears its next earnings release, which is expected to be December 12, 2019. On that day, COST is projected to report earnings of $1.71 per share, which would represent year-over-year growth of 6.21%. Meanwhile, our latest consensus estimate is calling for revenue of $37.43 billion, up 6.72% from the prior-year quarter.

COST's full-year Zacks Consensus Estimates are calling for earnings of $8.56 per share and revenue of $162.93 billion. These results would represent year-over-year changes of +4.52% and +6.7%, respectively.

Investors might also notice recent changes to analyst estimates for COST. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.2% higher. COST is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note COST's current valuation metrics, including its Forward P/E ratio of 35.08. This valuation marks a premium compared to its industry's average Forward P/E of 23.41.

We can also see that COST currently has a PEG ratio of 4.13. 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 Retail - Discount Stores was holding an average PEG ratio of 2.37 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 8, which puts it in the top 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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