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Costco Stock Could Rally Into 2019

Big-box retailer COST tends to shine in the fourth quarter

Oct 1, 2018 at 1:25 PM
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Costco Wholesale Corporation (NASDAQ:COST) could have a big week, with the company slated to report earnings on Thursday, Oct. 4. What's more, COST shares could have a big quarter, too, if recent history is any indicator.

Specifically, Costco emerged as one of the best stocks to own in the fourth quarter, looking back 10 years. The equity has averaged a quarterly gain of 5.43%, and has ended the three-month stretch higher 80% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

COST stock has already had a stellar year, gaining more than 43% in the past 52 weeks. The shares touched an all-time high of $245.16 on Sept. 11, but have since pulled back to support at their 30-day moving average, following a round of negative analyst attention in mid-September. At last check, Costco stock was fractionally higher on the day, trading at $235.11. Another 5.43% pop from current levels would place the equity just under $248 -- and in uncharted territory -- to start 2019.

COST stock chart oct 1

However, the stock's recent earnings reactions have been less than stellar, with COST moving lower the day after three of the last four earnings releases. On average, the shares have moved 2.8% the day after earnings, looking back eight quarters, regardless of direction. This time around, the options market is pricing in a slightly bigger 4.2% move for Costco.

 

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