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

Costco (COST) closed at $371.73 in the latest trading session, marking a +0.59% move from the prior day. This move outpaced the S&P 500's daily loss of 0.68%.

Coming into today, shares of the warehouse club operator had gained 12.71% in the past month. In that same time, the Retail-Wholesale sector gained 0.87%, while the S&P 500 gained 6.62%.

Investors will be hoping for strength from COST as it approaches its next earnings release, which is expected to be May 27, 2021. The company is expected to report EPS of $2.23, up 17.99% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $43.08 billion, up 15.61% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.92 per share and revenue of $188.27 billion. These totals would mark changes of +12.09% and +12.9%, respectively, from last year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Within the past 30 days, our consensus EPS projection has moved 0.34% higher. COST currently has a Zacks Rank of #3 (Hold).

Digging into valuation, COST currently has a Forward P/E ratio of 37.36. This represents a premium compared to its industry's average Forward P/E of 27.15.

We can also see that COST currently has a PEG ratio of 4.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.37 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 242, putting it in the bottom 5% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Costco Wholesale Corporation (COST): Free Stock Analysis Report
 
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