Stock Analysis | Costco Wholesale Outlook - Mixed Signals Amid Earnings Watch

Market Snapshot

Costco's stock faces a weak technical outlook, with bearish signals dominating, while strong money inflows from large investors contrast with mixed analyst sentiments. Recent price trends have seen a fall of -4.29%, which contrasts with the overall positive money-flow trend.

News Highlights

• Costco Wholesale is preparing to release its quarterly earnings on May 29, 2025. Analysts are forecasting an earnings per share (EPS) of $4.21, which could provide a much-needed direction for the stock. Investors are advised to closely watch this event.
• A board member of BJ's Wholesale Club made a notable insider purchase of $199,000 in stock. This insider buy may be seen as a vote of confidence in the wholesale retail sector, which could indirectly influence Costco's market perception.
• Cambridge Savings Bank extended a $5 million revolving credit facility to Global Printing & Packaging. While not directly related to Costco, this move highlights ongoing business expansion in related sectors, which may indirectly benefit Costco's supply chain partners or logistics industry.

Analyst Views & Fundamentals

Average rating score: 4.00 (simple mean)

Weighted rating score: 3.95 (performance-weighted)
Rating consistency: Consistent, but recent price trends have shown a fall (-4.29%) that appears to mismatch with the analysts' expectations.
Alignment with price trend: The market expectations remain relatively neutral, but the current price decline may suggest that the stock is facing short-term challenges.

Key fundamental values and their internal diagnostic scores (0-10):

• Net cash flow from operating activities per share (YoY growth rate %): -7.24% (score: 2)
• Net profit attributable to parent company shareholders / Net profit (%): 100.00% (score: 2)
• Annualized return on equity (%): 29.16% (score: 2)
• EV/EBIT: 163.19 (score: 3)
• Quick ratio: 49.04% (score: 2)
• Net cash flow from operating activities (YoY growth rate %): 11.63% (score: 3)
• Current assets turnover ratio: 3.54% (score: 1)
• ROE (diluted) (%): 14.02% (score: 2)
• GPOA: 10.90% (score: 2)
• Equity multiplier (DuPont analysis %): 2.91% (score: 1)

Money-Flow Trends

Big-money flows: Large investors and institutional money continue to show a positive trend, with large inflow ratios of 48.67% and extra-large inflow ratios of 52.40%.

Retail flows: Retail investors are also showing a positive inflow trend, with small inflow ratios at 54.59% and medium inflow ratios at 48.98%.
Overall trend: Despite some bearish technical indicators, the overall money-flow trend is positive, with an overall inflow ratio of 51.62%. This suggests that large and small investors are still placing bets on Costco's future, despite the short-term challenges in its technical outlook.

Key Technical Signals

Internal diagnostic scores for key indicators:

• WR Oversold: 2.36 (internal diagnostic score). This indicator suggests a weak signal for a potential rise, but the win rate is only 45.76%, indicating uncertainty.
• MACD Death Cross: 4.66 (internal diagnostic score). While this signal is somewhat stronger, the win rate is still moderate at 55.56%.

Recent chart patterns:

• On 2025-08-22 and 2025-08-26, the WR Oversold indicator triggered, suggesting a potential oversold condition.
• On 2025-08-25, both WR Oversold and MACD Death Cross indicators were active, showing conflicting signals and increased volatility.
• From 2025-08-28 to 2025-08-29, WR Oversold continued to appear, reinforcing the bearish sentiment.

Key insights: Technical indicators are signaling a weak market trend, with bearish signals dominating. The volatility remains high, and the overall momentum is unclear, suggesting caution for investors considering short-term trades.

Conclusion

Watch the upcoming earnings report closely. Given the mixed technical signals and weak internal diagnostic scores (3.51), Costco is not in a favorable position for aggressive short-term trading. The recent money-flow trends are encouraging, but they may not be enough to offset the bearish technical indicators. Investors should consider waiting for more clarity from the earnings report and potential follow-up news before making any major moves.