Market Overview

Costco Could Move 2% After Earnings


Costco Wholesale Corporation (NASDAQ: COST) reports Q3 earnings Wednesday following the market close.

The Estimize consensus expected EPS of $1.19 on revenue of $26.813 billion. The Wall Street consensus was somewhat lower, coming in with EPS of $1.15 on revenue of $26.568 billion.

Speaking to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan said that, based on implied volatility in the options market, traders expected a move of less than 2 percent in the stock following earnings.

Looking back to the last earnings report, Kinahan noted the stock had fallen approximately 5 percent since its previous release.

Related Link: Costco Shares In Line With Special Dividend-Adjusted Price

Discussing options trading activity, Kinahan cautioned that options trades on Costco were typically not very large. However, increased trading was seen on the weekly $144/$145 Call spread as well as increased buying for the June $145 Calls.

Over the past three months, the company’s shares were down over 1 percent, while up 2.5 percent Year to Date. In February, it hit a high of $155.92 before falling back to the $145 level.

Goldman Sachs also recently commented on the stock. The firm set a price target of $154 and a Neutral rating following the company’s March/April same-store-sales report.

Heading into its earnings release, the stock was gaining ground. Costco Wholesale Corporation recently traded at $145.33, up 1.45 percent.


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