Costco Wholesale Outlook - Mixed Signals as Earnings Loom

Market Snapshot

Headline Takeaway: Costco (COST) is showing a 2.27% price rise in recent sessions, but mixed technical signals and cautious analyst guidance suggest investors should remain cautious ahead of key earnings.

News Highlights

• Upcoming Earnings Event: Costco is set to release its quarterly earnings on May 29, 2025. Analysts are forecasting an EPS of $4.21, creating anticipation for how the retail giant will handle a challenging economic environment.
• Insider Purchase at BJ’s Wholesale: On May 29, Steven Ortega, a board member of BJ's Wholesale Club, purchased $199,000 worth of stock, signaling confidence in the wholesale retail sector.
• Global Printing & Packaging Expansion: A $5 million line of credit was announced for Global Printing & Packaging to support new equipment and streamlined operations, hinting at broader economic tailwinds that could affect retail and supply chains.

Analyst Views & Fundamentals

Average Rating Score (Simple Mean): 4.00

Weighted Rating Score (Performance-Weighted): 4.06

Rating Consistency: Analysts' expectations are consistent with the current upward price movement, but the historical performance of the involved analysts suggests caution. JP Morgan has a win rate of 0.0%, while Telsey Advisory Group is at 46.2%.

Alignment with Price Trend: The current price rise aligns with the optimistic expectations from analysts, but the technical signals suggest a volatile market with unclear direction.

Key Fundamental Values:

• Net cash flow from operating activities per share (YoY growth rate %): -93.20% (internal diagnostic score: 2.00)
• Shareholders’ equity attributable to parent company / Total liabilities (%): 53.68% (internal diagnostic score: 1.00)
• Equity ratio (Total liabilities / Shareholders’ equity attributable to parent company) (%): 186.29% (internal diagnostic score: 2.00)
• Net cash flow from operating activities / Operating revenue (%): 4.77% (internal diagnostic score: 3.00)
• Diluted earnings per share (YoY growth rate %): 7.61% (internal diagnostic score: 3.00)
• Total assets turnover ratio: 1.76 (internal diagnostic score: 3.00)
• Cash-MV: -0.55 (internal diagnostic score: 0.00)

Money-Flow Trends

Big money is showing a positive trend across most categories, with the overall inflow ratio at 50.79%. Large, extra-large, and block funds are all contributing positively, with block money flow at 50.86%. Retail investors are also active, with small and medium trends showing positive inflows. This suggests broad market support, though technical indicators caution about volatility.

Key Technical Signals

Internal Diagnostic Scores (0-10):

• WR Overbought: 7.03 (suggesting internal strength in overbought conditions)
• WR Oversold: 2.39 (showing weak internal signals in oversold conditions)
• MACD Golden Cross: 3.92 (modest internal support for a bullish crossover event)

Recent Chart Patterns (Last 5 Days):

• Overbought (WR): Seen on September 9 and August 28–29
• Golden Cross (MACD): Noted on August 29
• Oversold (WR): Seen on August 28–29

Technical Summary: The market is in a volatile state with mixed signals, and the overall trend remains weak. Long and short positions are relatively balanced, and investors should closely monitor the chart for new direction signals.

Conclusion

With mixed technical signals, a weak trend, and cautious analyst ratings, Costco investors should consider waiting for a clearer breakout signal ahead of the May 29 earnings release. Given the volatility, it may be wise to hold off on aggressive entries and instead monitor how the market reacts to the earnings report and any guidance from management.