Yahoo Finance Costco Wholesale Corporation (NASDAQ:COST) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates
Costco Wholesale Corporation (NASDAQ:COST) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Costco Wholesale reported in line with analyst predictions, delivering revenues of US$37b and statutory earnings per share of US$1.89, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Costco Wholesale after the latest results.
See our latest analysis for Costco Wholesale
Taking into account the latest results, the most recent consensus for Costco Wholesale from 25 analysts is for revenues of US$173.7b in 2021 which, if met, would be a reasonable 8.0% increase on its sales over the past 12 months. Per-share earnings are expected to accumulate 10.0% to US$9.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$173.9b and earnings per share (EPS) of US$9.34 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$322. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Costco Wholesale analyst has a price target of US$360 per share, while the most pessimistic values it at US$235. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Costco Wholesale'shistorical trends, as next year's 8.0% revenue growth is roughly in line with 7.4% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.5% per year. So it's pretty clear that Costco Wholesale is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Costco Wholesale analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Costco Wholesale you should be aware of.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.
