Costco Wholesale (COST) and Insulet (PODD) both broke out of flat bases and reached highs Friday. Costco stock is on track for its sixth straight day of gains, while Insulet soared after the company’s earnings report.
Costco shares climbed 1.6% Thursday after the wholesale warehouse retailer late Wednesday reported October sales that grew 7.2% over the year-ago period. The stock got another 3.7% boost Friday afternoon, after Bernstein raised its price target to 1,062 from 1,016. The stock hit an all-time high Friday.
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How To Buy Stocks: Earnings Gaps
Costco Stock Breaks Out
Costco rose past the 923.83 buy point Friday in heavy volume. Shares are in a 5% buy zone up to 970.02, according to MarketSurge pattern recognition.
The newly added IBD Leaderboard stock has climbed 43% so far this year, but its relative strength line hasn’t kept up with the rise in the stock price.
Costco reported better-than-expected fiscal fourth-quarter earnings but lower sales than views on Sept. 26. Profit growth decelerated to 6% from gains of 10% to 12% the previous three quarters. Likewise, revenue growth slipped to 1% from increases of 6% to 9% over the same time period.
Fiscal first-quarter earnings estimates call for another 6% increase before ramping up to 11% over the following two quarters. Sales are forecast to rise an average 7% over the next four quarters.
Insulin Products Maker Soars On Earnings
Insulet is extended after surging Friday and breaking out of a flat base with a 243.98 buy point in heavy volume. The stock gained around 12% Friday midday, rising to the highest point since early August 2023. Because the stock gapped above its buy point, the five-minute high of 275 can serve as a logical buy point.
The giant move came after Insulet crushed third-quarter adjusted earnings and sales estimates Friday. Its profit growth slowed to 27% on a 26% revenue lift. Insulet also guided 12% to 15% fourth-quarter sales growth and raised its full-year 2024 estimate to a 20% to 21% rise.
Full-year 2024 profit estimates show a 31% increase then easing to 9% in 2025. Sales growth is projected to climb in the 13% to 18% range over the next four quarters, with a 22% bump in Q1 2025.
Insulet’s wearable pump, called a Pod, eliminates the need for multiple daily insulin injections for diabetics.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
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