Earnings Week Ahead: Costco's Margins Squeezed, Target's EPS Expectations Cut
Oracle: The stock might be priced slightly higher ahead of Q3/24. Fair value analysis indicates a 3.4% downside, against a more optimistic analyst view of a 9.2% increase.
Target: EPS estimates slightly lowered before Q4/24.
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Costco Wholesale (NASDAQ:COST) is set to release its Q2/24 earnings on March 7, after the market close.
Analysts' consensus currently stands at an EPS of $3.63 and revenues of $59.13 billion.
InvestingPro's analysis of EPS Forecast Trends indicates a minor negative adjustment in expectations for the upcoming quarter's EPS, with a decrease of 3.0% from an initial estimate of $3.74 to $3.63 over the past year. This adjustment comes even though Costco surpassed its EPS and revenue forecasts in the previous two quarters.
Our ProTips highlights several cautionary points for Costco, including indications that the stock may be overbought according to the RSI, its valuation at a high earnings multiple, a high P/E ratio compared to its near-term earnings growth, and concerns about its weak gross profit margins.
Furthermore, our Investing Models suggest that Costco's stock might be overpriced, estimating its fair value at $550.16. This valuation points to a potential 26.6% decrease from its last closing price. Analyst targets also indicate a potential 5.5% decline.
Oracle (NYSE:ORCL) is scheduled to announce its Q3/24 on March 7, following the market’s close. The consensus among analysts forecasts an EPS of $1.38 with revenue expectations of $13.29B.
Over the previous two quarters, Oracle has exceeded EPS estimates but reported revenues that fell short of Wall Street's expectations.
InvestingPro's Fair Value analysis
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