Costco Earnings Loom: Analysts Bullish But Brace for Stock Volatility Ahead

Costco's earnings report drops this week—and Wall Street's watching like hawks.

The Bull Case Holds Strong

Analysts maintain positive ratings despite anticipating turbulence. The wholesale giant's consistent performance keeps institutional confidence high even as market conditions shift.

Volatility on the Horizon

Traders prepare for potential price swings post-earnings. Historical patterns suggest sharp movements regardless of whether results beat or miss expectations.

The Retail Resilience Test

Costco faces the ultimate stress test as consumer spending patterns evolve. Its subscription model provides stability while competitors struggle with margin compression.

Meanwhile, traditional analysts will likely overreact to minor fluctuations—because nothing says 'financial expertise' like panicking over quarterly noise while missing decade-long trends.

Key Takeaways

• Costco is scheduled to release its fourth-quarter results Thursday. The numbers are due after some numbers suggested that its growth was decelerating earlier this year.
• Investors may want to "take advantage" of any volatility this may create for Costco shares and buy its stock, Oppenheimer said.
• The company can deliver "sustainable" results, even in an increasingly competitive market, the analysts said.

Costco shares may be in for a bout of volatility some analysts think could give investors a chance to snag a stock poised to deliver “sustainable” results.

Costco Wholesale (COST) is slated to report fourth-quarter earnings after the closing bell Thursday. The update comes after some investors were shaken in the spring by signs that sales growth had decelerated. Sales ROSE less—on a year-over-year basis—in the third quarter than they did in the second, and some monthly sales reports suggested that momentum was slowing.

Why This News Matters to Investors

Costco stock has been on a hot multiyear run, but this year has been a bumpy one—and the company's latest quarterly results are due Thursday. Analysts are generally bullish on the company, a favorite of investors and shoppers alike, but some of them say the volatility is likely to continue.

Those concerns may have weighed on a stock that generally rose between March lows and June before retreating again. More fluctuations may be ahead, Oppenheimer said, but that need not be a source of anxiety,

“We WOULD continue to take advantage of a likely volatile trade amidst very difficult upcoming [year-over-year] compares in the non-foods category and likely nearer-term [earnings per share] headwinds,” analysts wrote in a recent research note.

Annual comparisons may be influenced by Costco’s recent expansion of warehouse hours for executive members, Oppenheimer said. People stocking up on goods ahead of a port strike last fall may also be a factor, Citi said.

Related Education

Company sales came in at $84.4 billion for the fourth quarter, up 8% from last year, according to the company. Comparable store sales rose 5.7% year-over-year. Analysts anticipate the company will report $2.6 million in profit, up from $2.4 million a year earlier, according to consensus estimates from Visible Alpha.

Costco shares, up 2.6% so far this year, have gained some 170% over the past five years. Wall Street analysts think the stock, which ended Tuesday around $944, can rise to $1,080, according to the consensus estimate as tracked by Visible Alpha.