Earnings Preview: What To Expect From Costco On Thursday

Costco Wholesale Corp. is scheduled to report earnings after Thursday’s close. The stock hit a record high of $612.27/share in 2022 and is currently trading near $480/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

The company is expected to report a gain of $3.14/share on $54.81 billion in revenue. Meanwhile, the so-called Whisper number is $3.25/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals:

The company has done a wonderful job consistently growing its earnings over the last few years. The fact that it continues to grow speaks volumes to how well the company is run because a company that large usually has a hard time consistently growing both its top and bottom line in a period of slower economic growth and high inflation. Further, return on equity is a very strong 30% which is also very attractive.

A Closer Look At The Technicals:

Technically, the stock is in a downtrend for most of this year and just fell 21% below its 52-week high. The bulls want to see the stock gap up and rally after reporting earnings and the bears want to see it gap down and fall. October’s low of $449.03 is the next important level of support to watch. If that level is broken, then another leg down may easily follow.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Disclosure, the stock has been previously featured in my FindLeadingStocks.com newsletter.