The recent break-out to the upside has created potential for further gains for shares in Costco Wholesale Corporation.
Summary
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● In a short-term perspective, the company has interesting fundamentals.
Strengths
● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
● Historically, the company has been releasing figures that are above expectations.
● The stock, which is currently worth 2018 to 0.62 times its sales, is clearly overvalued in comparison with peers.
● The company is one of the best yield companies with high dividend expectations.
● For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 170.98 USD
Weaknesses
● Stock prices approach a strong long-term resistance in weekly data at USD 198.91.
● Technically, the stock approaches a strong medium-term resistance at USD 198.91.
● With a 2018 P/E ratio at 27.59 times the estimated earnings, the company operates at rather significant levels of earnings multiples.
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Costco Wholesale Corporation specializes in the distribution of products and services at discount prices (food, sports equipment, household appliances, books, toys, jewelry, TVs, cameras, photo developing and printing services, etc.). The group develops its activity through a network of warehouse stores opened to individuals or companies who have paid a subscription fee. Net sales break down by revenue source as follows:
- sales of products (98.1%);
- sales of subscriptions (1.9%).
As of 03/09/2023, Costco Wholesale Corporation had a network of 861 warehouse stores located in the United States and Puerto Rico (591), Canada (107), Mexico (40), Japan (33), the United Kingdom (29), Korea (18), Australia (15), Taiwan (14), China (5), Spain (4), France (2), Sweden, New Zealand and Iceland.
Net sales are distributed geographically as follows: the United States (72.9%), Canada (13.6%) and other (13.5%).