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In the latest trading session, Costco (COST) closed at $483.47, marking a +1.29% move from the previous day. This move outpaced the S&P 500's daily loss of 0.15%. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.05%.
Prior to today's trading, shares of the warehouse club operator had lost 15.47% over the past month. This has lagged the Retail-Wholesale sector's loss of 11.49% and the S&P 500's loss of 7.66% in that time.
Costco will be looking to display strength as it nears its next earnings release, which is expected to be March 3, 2022. The company is expected to report EPS of $2.64, up 23.36% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $50.4 billion, up 12.57% from the prior-year quarter.
COST's full-year Zacks Consensus Estimates are calling for earnings of $12.63 per share and revenue of $217.25 billion. These results would represent year-over-year changes of +13.99% and +10.88%, respectively.
Investors should also note any recent changes to analyst estimates for Costco. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 0.66% higher. Costco is currently a Zacks Rank #2 (Buy).
Digging into valuation, Costco currently has a Forward P/E ratio of 37.81. For comparison, its industry has an average Forward P/E of 22.13, which means Costco is trading at a premium to the group.
Investors should also note that COST has a PEG ratio of 4.31 right now. 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 1.94 based on yesterday's closing prices.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
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