Costco Wholesale Corporation shares are getting pummeled in the aftermath of Thursday evening’s fiscal fourth quarter earnings report, dropping more than nine points to a four-week low despite beating EPS and revenue estimates. Weak gross margins have been cited for the decline, while fears of growing competition from Amazon.com, Inc.’s Whole Foods acquisition have also weighed on sentiment.
RBC, Stifel and Telsey analysts retained positive ratings after the news, insisting that investor fears are overblown and that the stock will prosper despite growing headwinds. Rapid e-commerce growth and solid traffic numbers have underpinned those optimistic outlooks, which may limit the downside in coming days. However, Morgan Stanley issued a downgrade ahead of the open, and others may follow, adding selling pressure that drops the price into critical support near $153. (See also: 7 Retail Stocks Hammered by Amazon May Be Good Buys.)
Costco has fallen nearly 10 points and 6% so far in Friday’s session after a bearish reaction to quarterly earnings. …read more
Read more here: Costco Stock Gets Pummeled Despite Upbeat Quarter
Category: COST, AMZN