Here’s How Much Costco Stock Is Expected to Move After Earnings
Costco is set to report earnings Thursday afternoon, with traders expecting the stock could move 3% in either direction by the end of the week.
Analysts expect Costco to report rising sales and profits, but warned it could be challenged to impress investors with its results.
Costco is set to report earnings Thursday afternoon, with traders expecting a move that could drag the stock back near where it started the year.
Based on current options pricing, Costco (COST) shares are seen swinging up to 3% in either direction by the end of the week. A move of that size from Tuesday's close could drag the shares as low as $873, largely erasing their year-to-date gains, or push them up to $925.
Costco shares are up less than 5% for the year so far, after a big pullback from their May record. Though the retailer's shares got a boost earlier this year as inflation-weary consumers flocked to the wholesaler in search of deals, they've taken a hit after results that failed to top lofty targets .
Despite signs that Costco's value proposition is resonating with consumers , it could be challenged to impress investors in the face of macroeconomic headwinds.
Ahead of the results, Bank of America analysts trimmed their price target to $1,095 from $1,200, citing a "more cautious" view of Costco's margins amid high fuel costs and the likelihood that Costco will use tariff refunds to cut prices. UBS analysts said investors could also be more focused on Costco's membership growth.
Costco is projected to report a record $94.85 billion in fiscal fourth-quarter revenue, up 10% year-over-year. Earnings per share are seen coming in at $6.52, compared to $5.87 a year ago, per Visible Alpha estimates. Comparable store sales are expected to have grown 8.88%, while Costco's membership base likely swelled to 84.68 million, up from 81 million a year ago.
Wall Street analysts remain largely bullish on Costco. Seven of the 11 analysts tracked by Visible Alpha consider the stock a "buy," while three hold neutral ratings and just one advises selling. Their mean target of $1,048 would suggest 16% upside from Tuesday's close.
