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MARKETS LIVE BLOG:

STOCKS SLIP WITH MIDEAST TENSIONS, EARNINGS IN PLAY

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The Best Options Trade for Costco (COST) Earnings

Patrick Anderson
Updated

On Thursday, September 29th, Costco (COST) will release its Q4 earnings results after the bell. The company is a Zacks Rank 3 (Hold), and they were upgraded within the last 30 days due to upward revisions in their earnings estimates.

Dave will investigate Costco’s past earnings, look at what is currently going on with the company, and give us his thoughts on their upcoming earnings announcement.

Furthermore, Dave will uncover some potential options trades for investors looking to make a play on Costco ahead of earnings.

Costco Inc. in Focus

Costco Wholesale Corp. operates membership warehouses based on the concept that offering members’ very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. This rapid inventory turnover enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets.

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Costco is expected to report earnings at $1.73 per share according to the Zacks Consensus Estimate. Last quarter they reported an earnings at $1.24 per share beating the Zack’s Consensus Estimate of $1.21 per share, and they have an average surprise of -1.91% over the last four quarters.

COSTCO WHOLE CP Price, Consensus and EPS Surprise

COSTCO WHOLE CP Price, Consensus and EPS Surprise | COSTCO WHOLE CP Quote

Costco is trading around $151 a share, and they are below their 52-week high of $169.73 per share.

The Zacks Industry Rank classifies Costco Ltd. in the retail-discount industry, and their industry is in the bottom 37%. The retail-discount industry is very competitive with Walmart’s (WMT) Sam’s Club being their direct competitor. Meanwhile, other chains such as Dollar Tree (DLTR), Dollar General (DG), and Target (TGT) do their best to win over consumers Costco is targeting.

Bottom Line

How should investors play Costco ahead of their earnings report? For insights on the best options trades, make sure to watch Dave Bartosiak at 1:00pm CST next Wednesday to see if he’ll be bullish, or bearish. If you are interested in Dave’s exclusive live streams and service, then sign up for Zacks Live Trader.


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WAL-MART STORES (WMT): Free Stock Analysis Report
 
DOLLAR TREE INC (DLTR): Free Stock Analysis Report
 
DOLLAR GENERAL (DG): Free Stock Analysis Report
 
COSTCO WHOLE CP (COST): Free Stock Analysis Report
 
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Zacks Investment Research