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

In the latest trading session, Costco (COST) closed at $363.17, marking a -0.56% move from the previous day. This change lagged the S&P 500's daily loss of 0.41%.

Prior to today's trading, shares of the warehouse club operator had gained 11.6% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.33% and the S&P 500's gain of 5.07% in that time.

COST will be looking to display strength as it nears its next earnings release, which is expected to be May 27, 2021. On that day, COST is projected to report earnings of $2.23 per share, which would represent year-over-year growth of 17.99%. Our most recent consensus estimate is calling for quarterly revenue of $43.08 billion, up 15.61% from the year-ago period.

COST's full-year Zacks Consensus Estimates are calling for earnings of $9.92 per share and revenue of $188.27 billion. These results would represent year-over-year changes of +12.09% and +12.9%, 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.34% higher within the past month. COST currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, COST is holding a Forward P/E ratio of 36.81. Its industry sports an average Forward P/E of 26.85, so we one might conclude that COST is trading at a premium comparatively.

We can also see that COST currently has a PEG ratio of 4.2. 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 industry currently had an average PEG ratio of 2.33 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 226, which puts it in the bottom 12% 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.

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


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