Costco wholesale
Costco wholesale
COST
$14.17
1.8%
22%
IBD Stock Analysis
- The Cup has a buy point of 787.08. In buy range up to 826.43.
Classification of industrial groups
Emerging model
Cup
* No real-time data. All data shown was captured at 1:38 p.m. EDT on 05/16/2024.
Costco (COST) is the IBD Stock of the Day as strong monthly sales data bolsters rising earnings estimates. Costco stock broke out Thursday ahead of its earnings release later in May.
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THURSDAY, Walmart (WMT) gave optimistic outlook amid falling inflation, while beating earnings estimates for its latest quarter. Walmart stock also broke out on Thursday.
Costco, a leader in warehouse retailing, announced May 8 that its April sales were up 7% from last year. This followed April’s announcement of a 9% gain in sales in March, accompanied by a Costco dividend hike of almost 14%. The growing demand for gold bars has boosted foot traffic.
About a dozen analysts raised their price targets on Costco shares in May, according to FactSet. Cutting.
Costco Stocks Burst
Shares gained 0.8% to 793.07 on the stock market today. This put Costco stock in a buy zone above a 787.08 buy point from a bottom of cup. The retail giant initially allowed this entry on May 10 before retreating below the entry, the MarketSurge Pattern Recognition watch.
THE line of relative force is near highs as the stock breaks out, a confirmation of technical strength. The RS Line, the blue line in the chart shown, tracks a stock’s performance relative to the S&P 500 Index.
Costco Profit Growth
The retailer will report its fiscal third quarter on May 30. Analysts on average now expect earnings per share of 3.71, according to FactSet. This represents an increase from third-quarter EPS of $3.61 at the start of 2023. Estimates for the full fiscal year increased during this same period, from $15.58 to $16.11 .
For the full year, Wall Street is reporting an EPS increase of nearly 14% on revenue growth of 5%. Costco’s fiscal year ends in August.
Costco earns a superior EPS rating of 91 out of 99 from Investor’s Business Daily. The warehouse retail giant posts four consecutive years of annual EPS growth, the IBD Inventory Check Tool watch.
Earnings per share growth has averaged 13.5% over the past three quarters. That’s above the three-year average of 11% profit growth.
Membership, Gold Bars and E-Commerce
In fiscal 2023, dues revenue increased 8% to $4.6 billion, according to Costco’s annual report. Its membership base has grown to nearly 128 million cardholders, with a 90% renewal rate.
Helping These Numbers: Growing Ecommerce Sales in the Shadow of Amazon (AMZN). Like Costco, Walmart is also experiencing strong e-commerce growth.
During the most recent quarter, Costco’s online sales increased 18.4% from the previous year. This growth shows it is doing a better job of promoting the value of big-ticket items like appliances, mattresses and tires, the company says.
Meanwhile, customers flock to Costco to buy gold bars and silver coins. The retailer could sell $200 million worth of gold and silver per month, according to a Wells Fargo analysis.
The warehouse club began selling bullion late last summer.
The move appears to be an attempt to burnish Costco’s “treasure hunt” image. Margins on gold are expected to be minimal, Wells Fargo analysts said.
Over the past year, Costco stock has gained 60.75%, more than double the returns of the S&P 500. It has far outperformed that index – and Amazon stock – over the past five years, climbing by 221%.
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