Costco Stock In Spotlight Ahead Of Earnings As Investors Eye Value-Driven Strategy Amid US Consumer Caution

Costco (COST) stock was in the spotlight on Monday ahead of the release of its quarterly results this week as investors look forward to the retailer's merchandising strategy and the company's focus on offering value to customers.

The company is set to report fourth-quarter results on Thursday. Costco is expected to post fourth-quarter sales of $86.14 billion and adjusted earnings per share (EPS) of $5.81, according to data from Koyfin.

Retail sentiment on Costco remained unchanged in the 'neutral' territory, with message volumes at 'normal' levels, according to data from Stocktwits. Shares of Costco were down over 1% during midday trading on Monday.

Last week, Wolfe Research assumed coverage of Costco with a 'Peer Perform' rating, according to TheFly. The firm noted that Costco's focus on value, volumes, and merchandising has created a strengthening flywheel.

Costco reported net sales of $21.56 billion for the retail month of August, marking an increase of 8.7% from $19.83 billion last year.

Wolfe Research noted that, with over 90% renewal rates, higher-income consumers, and the stock lagging recently, the firm likes the setup. The firm added that the valuation remains elevated at 50x earnings and is more expensive than many tech firms, but the comparable and earnings consistency provide some downside protection.

Shares of Costco were up nearly 3% this year, as well as in the last 12 months.

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