BUZZ - Preview: Costco financial report will test sales momentum

September 24 - ** On Thursday, Costco Wholesale (COST.O) shares fell 0.7% to $898.75. The company will release its quarterly earnings report after the market close, with investors focusing on the latest consumer spending and sales trends.

** According to data from London Stock Exchange Group (LSEG), the warehouse membership retailer’s revenue for the fiscal fourth quarter is expected to increase by 10% to $94.86 billion, with adjusted earnings per share of $6.53, up from $5.87 a year earlier.

** Earlier this month, the company reported (link) that net sales in August rose 9.9% year-on-year, and same-store sales rose 9.4% in the fourth quarter, indicating robust demand.

** In May, COST reported (link) better-than-expected third-quarter revenue, benefiting from surging gasoline prices that drove more consumers to its low-priced fuel offerings.

** The stock currently trades at a price-to-earnings ratio of 40 times, roughly in line with its five-year average of 41 times — LSEG.

** So far this year, COST’s share price has risen about 4%, compared to around a 6% gain for the S&P 500 Consumer Staples Index .SPLRCS.

** Of 40 analysts, 25 rate the stock as “strong buy” or “buy,” 14 recommend “hold,” and 1 suggests “sell.” The median price target is $1,100, unchanged over the past three months.

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