Costco EPS Forecast Up 12.4%, Cash Flow +10.9% Earns Growth Score A
Analyst highlights Q4 traffic declines at Target with a 2.5% comp sales drop and urges favoring Costco's stronger performance on dips. Costco's EPS is forecast to grow 12.4%, its cash flow rose 10.9%, earning a Growth Score A and Zacks Rank #2 on a 0.4% earnings estimate revision.
1. Growth Evaluation
Costco holds a Zacks Growth Score of A, indicating strong earnings and cash flow momentum, and a Zacks Rank #2 (Buy) following recent upward revisions in profit estimates.
2. Earnings Projection
The Zacks Consensus forecasts Costco's EPS to grow 12.4% this year, surpassing the industry average of 10.2%, driven by consistent membership fee revenue and higher same-store sales.
3. Cash Flow Performance
Year-over-year cash flow increased 10.9%, outpacing the 6.8% industry average, with an annualized 13.4% growth over the past 3–5 years, bolstering funding for expansion without external financing.
4. Analyst Preference
Following Target's fourth-quarter comp sales decline of 2.5% and four straight quarters of traffic drops, analysts recommend favoring Costco on pullbacks due to its stable performance.