Let’s reassess the active stocks with an eye toward COST stock. Just how should we respond to Thursday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 06 December, shares of Costco Wholesale Corporation (NASDAQ:COST) closed higher after a volatile session. The shares accumulated 6.85 points or 3.03 percent at $233.2 with a heavy trade volume of 3.937 million shares. After opening the session at $227.94, the shares went as high as $233.86 and as low as $226.6, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $102 billion and now has 437.68 million shares outstanding. Costco Wholesale Corporation (COST) stock has lost -0.53 percent of market value in 21 trading days.
COST stock has a trailing 3-year beta of 0.9, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $7.14 a share in the trailing twelve months. The stock’s value has surged 25.3 percent year to date (YTD) against a rise of 24.16 percent in 12 month’s time. The company’s shares still trade -4.88 percent away from its 1-year high of $245.16 and 32.66 percent up from 52-week low of $175.79. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.
Costco Wholesale Corporation (COST) will probably climb 4.89 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $265-month high price target. This represents a whopping 13.64 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $250, which represents a return potential of 7.2 percent when compared to the closing price of the stock of $233.2 on Thursday, December 06. The lowest price target for the stock is $191 — slightly more than -18.1 percent from COST’s current share price.
History has shown that shares in Costco Wholesale Corporation have gone down on 18 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of COST’s Q1 earnings on December 13. Analysts are forecasting revenue to climb 8.6 percent to $34.6B in the fiscal first quarter, while earnings are seen soaring by nearly 11.72 percent to $1.62 per share. It earned $2.36 per share, in line with the $2.36, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $44.4B, better than the $44.3B analysts expected. Earnings are estimated to increase by 17.5 percent this year, 9.11 percent next year and continue to increase by 11.92 percent annually for the next 5 years.
Let’s take a look at some insider activity at Costco Wholesale Corporation (NASDAQ:COST) and see the pattern. The earliest insider trade took place on 10/30/2018. Galanti Richard A parted with a total of 4.16 thousand shares of company at average share price of $227.23. The total for the sales was set at $945.96 thousand. After this transaction, the Executive VP and CFO account balance stood at 39.27 thousand shares. The stock lost -0.39 percent since that insider sale. On 10/30/2018, Jelinek W Craig, President and CEO, sold 22.5 thousand shares at a price per share of $223.52. This removed 5.03 million shares from the insider’s fortune and the stock saw a 1.27 percent rally in value since the news became public. This transaction left 311.96 thousand shares in the President and CEO account.
On 10/25/2018, Executive VP Lazarus Franz E performed a sale transaction worth $5.22 million. This sale at $226.76 each has eliminated 23 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -0.18 percent decrease since the transaction was reported. The insider now is left with 37.26 thousand shares remaining in the account. Libenson Richard M, who performs the Director Emeritus job, sold 2.05 thousand shares for $458.98 thousand. The disposal occurred on 10/25/2018 was priced at $224 per share. The share price soared 1.05 percent since the reporting date. Libenson Richard M now left with a stake of 80.05 thousand COST stock worth $18.67 million after the insider selling.
The stock is currently hovering around the first support level of $228.58. Below this, the next support is placed in the zone of $223.96. Till the time, the COST stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 56.55 on daily chart, which may remain a cause for concern. If the price breaks below $223.96 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $235.84 mark may result into a pull-back move towards $238.48 level.
Shares of Costco Wholesale Corporation (COST) are trading at a P/E ratio of 27.24 times earnings reported for the past 12 months. The industry COST operates in has an average P/E of 25.51. Its P/E ratio went as low as 22.48X and as high as 29.56 over the 5-year span.Further, it is sporting a 0.72 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.32. 13 percent is the gross profit margin for Costco Wholesale Corporation and operating margin sits at 3.2 percent. Along with this, the net profit margin is 2.2 percent.