Here's Why Costco (COST) Fell More Than Broader Market

In the latest close session, Costco (COST) was down 2.45% at $933.54. This change lagged the S&P 500's 0.87% loss on the day. On the other hand, the Dow registered a loss of 1.32%, and the technology-centric Nasdaq decreased by 1%.

Heading into today, shares of the warehouse club operator had gained 3.2% over the past month, lagging the Retail-Wholesale sector's gain of 3.8% and the S&P 500's gain of 3.48%.

The investment community will be closely monitoring the performance of Costco in its forthcoming earnings report. The company is scheduled to release its earnings on September 24, 2026. The company's upcoming EPS is projected at $6.51, signifying a 10.90% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $94.46 billion, showing a 9.64% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $20.42 per share and a revenue of $301.94 billion, demonstrating changes of +13.51% and +9.7%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Costco. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Costco holds a Zacks Rank of #3 (Hold).

Digging into valuation, Costco currently has a Forward P/E ratio of 46.86. This signifies a premium in comparison to the average Forward P/E of 27.86 for its industry.

Investors should also note that COST has a PEG ratio of 4.55 right now. 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. As the market closed yesterday, the Retail - Discount Stores industry was having an average PEG ratio of 2.57.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 62, this industry ranks in the top 26% of all industries, numbering over 250.

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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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