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Costco (COST) Gains But Lags Market: What You Should Know

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Costco (COST - Free Report) ended the recent trading session at $872.35, demonstrating a +0.2% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily gain of 0.97%. Elsewhere, the Dow saw an upswing of 0.58%, while the tech-heavy Nasdaq appreciated by 1.39%.

Prior to today's trading, shares of the warehouse club operator had gained 3.87% over the past month. This has outpaced the Retail-Wholesale sector's loss of 2.12% and the S&P 500's loss of 1.85% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Costco in its upcoming earnings disclosure. The company's earnings report is set to go public on September 26, 2024. The company's upcoming EPS is projected at $5.02, signifying a 3.29% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $80.07 billion, showing a 1.44% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $16.27 per share and revenue of $254.55 billion. These totals would mark changes of +10.76% and +5.06%, respectively, from last year.

Any recent changes to analyst estimates for Costco should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.1% higher. At present, Costco boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Costco currently has a Forward P/E ratio of 53.51. This denotes a premium relative to the industry's average Forward P/E of 21.56.

Also, we should mention that COST has a PEG ratio of 5.73. 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 industry currently had an average PEG ratio of 2.43 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 155, which puts it in the bottom 39% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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