Stock Analysis | Costco Wholesale Outlook - Navigating Mixed Signals in a Volatile Market

1. Market Snapshot

Takeaway: Costco Wholesale (COST) is currently in a weak technical phase, with bearish signals dominating the chart — a sign of cautious sentiment ahead of key catalysts.

2. News Highlights

Costco is preparing to report quarterly earnings on 2025-05-29, with analysts expecting an EPS of $4.21. This event could provide much-needed clarity as the stock has fallen by 3.68% recently.

Meanwhile, BJ’s Wholesale Club (BJ) caught market attention after one of its board members made a large insider purchase of $199K, signaling confidence in the broader wholesale retail sector.

In related news, Global Printing & Packaging received a $5 million line of credit from Cambridge Savings Bank, hinting at broader market support for strategic growth across the retail ecosystem.

3. Analyst Views & Fundamentals

The average analyst rating for Costco is 4.00, with a slightly lower weighted performance-based rating of 3.95. These ratings suggest a neutral to mildly positive consensus, though they contrast with the recent 3.68% price drop, highlighting a disconnect between expectations and current price action.

From a fundamental standpoint, Costco's internal diagnostic scores highlight a mixed but generally strong profile:

• Net profit attributable to parent company shareholders (YoY growth rate): 7.62% – Internal diagnostic score: 6.62
• Diluted earnings per share (YoY growth rate): 7.61% – Internal diagnostic score: 6.62
• Total profit (YoY growth rate): 8.86% – Internal diagnostic score: 6.62
• Quick ratio: 0.49 – Internal diagnostic score: 6.62
• Asset-liability ratio: 65.07% – Internal diagnostic score: 6.62

4. Money-Flow Trends

Large-cap institutional buying has been a positive driver for Costco, with extra-large and large investors showing net inflows. Specifically, the extra-large inflow ratio is 50.88%, indicating strong interest from big-money players.

Meanwhile, medium-sized investors remain cautious, with a 48.73% inflow ratio, slightly below the overall inflow average of 50.45%.

This points to a divergence in sentiment, with institutional money still bullish while medium-sized investors tread more carefully.

5. Key Technical Signals

From a technical perspective, Costco is showing signs of weakness. The stock's internal diagnostic technical score is 4.53, signaling a weak technology phase with more bearish indicators than bullish.

• Williams %R Oversold has appeared repeatedly in the last five days (on 8/22, 8/25, 8/26, 8/28, and 8/29), with an internal diagnostic score of 2.75. This suggests a neutral-to-bullish bias but lacks strong confirmation.
• MACD Death Cross (on 8/25) has an internal diagnostic score of 6.3, indicating a neutral-to-bearish trend with moderate conviction.

Overall, the last five days have shown bearish dominance, with no clear breakout or reversal signals emerging. Traders should remain cautious.

6. Conclusion

Costco's earnings report on 2025-05-29 will be a key event to watch — it could either reinforce current bearish momentum or signal a reversal.

In the short term, the stock's weak technical signals suggest a considered wait-and-see approach, especially with bearish indicators like the MACD Death Cross still active.

For those already invested, monitoring inflow patterns, particularly from large-cap investors, may provide early clues about potential direction shifts.

With fundamentals still showing moderate strength and no major bearish surprises in the pipeline, Costco could still offer value — but patience may be key in this volatile phase.