How to Trade Costco After Q3 Performance

Costco operates a global chain of big-box retail stores where an annual membership is required to shop. Founded in 1983, it is now the third-largest retailer in the world. Its earnings and performance are used by analysts to learn more about the health of the consumer and the economy.  

The retailer recently published its third-quarter earnings report. Learn more about the company's performance and what the analysts are forecasting for the stock.

• The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Costco Q3 2023 Performance

Here are some of the key highlights from the latest third-quarter earnings report from Costco: 

• Earnings per share of $2.93 vs $3.29 expected 
• Warehouse club operator revenue $53.65 billion vs $54.47 billion expected 
• Net sales increased 1.9% to $52.60 billion 
• Net income of $1.30 billion, lower than the $1.35 billion same time last year 
• Quarterly revenue membership rose to $1.04 billion from $984 million the same time last year 

Costco reported a big miss in its earnings per share, coming in much lower than analysts were forecasting. A high level of uncertainty around consumer sentiment due to the impact of higher interest rates has caused other retailers such as Home Depot and Target Corp, to issue lower forecasts.  

Some analysts believed that Costco would have bucked the trend seen in other retailers due to its loyal customer base having to purchase a membership to shop in its stores. While Costco's membership revenue grew it didn't translate into better earnings per share than what analysts were expecting.  

However, as Costco's memberships range from $60 and $120 per year, it does account for most of its gross margin. Even though earnings per share missed analysts' estimates, the stock went on to rise 12% over the new few weeks before pulling back at the beginning of July.  

Costco is a business that is heavily dependent on the health of the consumer. While some central banks have stated they are slowing down the pace of interest rate hikes there are more to come this year. With higher interest rate payments on mortgages and credit cards, consumers could start to pull back on their shopping at places such as Costco.  

Therefore, tracking the health of the consumer economy is also important in analysing Costco's share price.

Costco Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for a Costco stock forecast in the past 3 months, there are currently 18 buy, 5 hold and 0 sell ratings on the stock. The highest price level for a Costco stock forecast is $635.00 with the lowest price target at $482.00. 

The average price target for a Costco stock forecast is $562.55.

An Example Trading Idea for the Costco Stock Price

An example trading idea for the Costco share price could be as follows:  

• Buy the stock on a break above $547.00 to allow for volatility. 
• Target just below the highest analyst price target of $635.00. 
• Keep your risk small at a maximum of 5% of your total account.   
• Time Line = 1 – 6 months  
• If you buy 10 Costco shares:  
  • If target is reached = $880.00 potential profit [($635.00 - $547.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how sensitive the stock is to the health of the consumer.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Costco stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Costco Stock in 4 Steps  

With Admirals, you can buy shares in companies like Costco with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

1. Open an account with Admirals to access the dashboard.   
2. Click on Trade on one of your live or demo accounts to open the web platform.   
3. Search for your stock in the search window at the top right to view the live price chart. 
4. Click Create New Order from the bottom of the screen to open the trading ticket. 

Click on the banner below to trade Costco stock today! ▼▼▼ 

Do You See the Costco Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance Costco's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 

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