Costco Wholesale Corporation

NASDAQ Global Select
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Slightly Bullish +25

Costco (COST) Stock Slides as Market Rises: Facts to Know Before You Trade

AI-generated analysis

📉 Costco stock closed at $995.32, dropping -2.08% while the broader S&P 500 gained 1.46%.

🏢 The retailer underperformed its Retail-Wholesale sector peers, which rose by 11.7% prior to today's session.

📅 Analysts expect Costco to release its earnings report on May 28, 2026, with a projected EPS of $4.88.

📈 Earnings estimates forecast a 14.02% year-over-year growth in EPS and 8.96% revenue growth for the upcoming quarter.

🎯 Full-year consensus estimates project earnings of $20.32 per share on $298.54 billion in revenue.

⚠️ Recent analyst estimate revisions have shifted slightly negative, with projections moving 0.03% lower recently.

📊 Costco currently holds a Zacks Rank of #3 (Hold) based on proprietary model analysis of estimate changes.

💰 The company trades at a Forward P/E ratio of 50.03, significantly higher than the industry average of 27.75.

🤯 A PEG ratio of 5.01 suggests Costco is trading at a substantial premium to the industry norm of 3.1.

🏆 The Retail - Discount Stores industry ranks in the top 21% with a Zacks Industry Rank of 50.

📉 Historical data indicates that top-rated industries outperform lower-rated ones by a factor of 2 to 1.

Bullish Signals
  • Costco is predicted to post EPS of $4.88, indicating a strong 14.02% growth compared to the equivalent quarter last year.
  • Full-year consensus estimates call for earnings of $20.32 per share with revenue of $298.54 billion, representing double-digit year-over-year growth in both metrics.
  • The company's Retail - Discount Stores industry ranks in the top 21% of all industries by Zacks Industry Rank, placing it in a high-performing peer group that historically outperforms the bottom half by a factor of 2 to 1.
  • Costco holds a Zacks Rank of #3 (Hold), and the proprietary model has a track record with stocks rated #1 producing an average annual return of +25% since 1988, suggesting potential for upside if rank improves.
Risk Factors
  • Costco's stock closed down -2.08% at $995.32, significantly lagging the S&P 500's gain of 1.46%, suggesting a decoupling from broader market strength.
  • The company trades at a Forward P/E ratio of 50.03, which is a substantial premium compared to the industry average of 27.75, implying expensive valuation relative to peers.
  • Costco's PEG ratio stands at 5.01, markedly higher than the Retail - Discount Stores industry average of 3.1, indicating that current pricing may not adequately account for its growth prospects.
  • Analyst consensus EPS projections have recently moved 0.03% lower, a negative signal in the short-term business trend analysis.
  • The stock currently holds a Zacks Rank of #3 (Hold), which is a neutral-to-negative rating compared to the strong buy or buy categories that historically produce higher annual returns.
Full Analysis
Costco Wholesale Corporation (COST) shares slid 2.08% to close at $995.32, trailing the broader market as the S&P 500 rose 1.46%, the Dow gained 1.24%, and the Nasdaq advanced 2.03%. The stock also lagged the Retail-Wholesale sector, which posted an 11.7% gain for the session. Investors are awaiting the company's upcoming earnings report scheduled for May 28, 2026, where analysts predict earnings per share (EPS) of $4.88, representing a 14.02% year-over-year increase, and revenue of $68.87 billion, an 8.96% rise compared to the prior year quarter. Full-year Zacks Consensus Estimates project Costco earnings of $20.32 per share with revenue at $298.54 billion, indicating year-over-year growth of +12.95% and +8.47%, respectively. Recent analyst estimate revisions have slightly lowered the consensus EPS projection by 0.03% over the past 30 days. Consequently, Costco currently holds a Zacks Rank of #3 (Hold), whereas the article notes that companies with a Zacks Rank of #1 (Strong Buy) have historically delivered an average annual return of +25% since 1988. Valuation metrics show Costco trading at a Forward Price-to-Earnings ratio of 50.03, which is significantly higher than the industry average of 27.75. The stock also trades at a PEG ratio of 5.01 compared to an industry average of 3.1 for Retail-Discount Stores. Despite this premium valuation relative to peers and the sector, Costco's industry group holds a Zacks Industry Rank of 50, placing it in the top 21% out of over 250 industries tracked, as research suggests top-half rated industries outperform the bottom half by a factor of 2 to 1.