Costco Wholesale Corp (NASDAQ:COST) stock ticked downward on Tuesday, experiencing mild pullbacks primarily driven by pre-earnings volatility. Investors are bracing for the retail giant’s upcoming financial disclosure.

Fuel Margin Pressures

Despite the daily dip, Wall Street maintains a highly optimistic outlook. Oppenheimer analyst Rupesh Parikh recently raised the firm’s price forecast on Costco to $1,160 from $1,100, maintaining an outperform rating. The firm positioned the retailer at the top of its preferred list.

However, Parikh acknowledged potential short-term friction. Oppenheimer noted that fuel-related margin pressure could lead to a modest earnings-per-share miss in the upcoming quarter, though they emphasized that Costco’s overall value proposition across its omnichannel and fuel divisions continues to capture substantial market share.

Robust Foot Traffic Counters Headwinds

Data from Placer.ai reveals that surging national gas prices are pushing consumers to warehouse clubs. Costco's gas station traffic spiked significantly, posting year-over-year visitor growth of 8.1% and 11.4% in the first two weeks of March alone. This elevated foot traffic could boost membership sign-ups and drive higher auxiliary in-store sales.

Upcoming Third-Quarter Earnings

Costco is scheduled to report its third-quarter financial results on Thursday. Analysts estimate an earnings per share (EPS) of $4.92 alongside quarterly revenue of $69.42 billion. Notably, the wholesale retailer carries strong momentum into the print, having beaten consensus EPS estimates for four consecutive quarters.

Investors are also closely monitoring potential structural catalysts. Oppenheimer noted the possibility of a special dividend or a stock split, which continues to underpin long-term bullish sentiment.

Critical Price Levels To Watch for COST

From a trend perspective, Costco is still holding a longer-term uptrend structure: it's trading 1.3% above its 100-day SMA ($989.04) and 4.6% above its 200-day SMA ($957.44).

The golden cross in March (50-day SMA above the 200-day SMA) remains a constructive backdrop, even as the stock cools from its May swing high and 52-week high.

In the near term, the chart is more fragile: Costco is trading 2.4% below its 20-day SMA ($1026.72) and 0.6% below its 50-day SMA ($1007.85).

  • Key Resistance: $1031.50
  • Key Support: $985

COST Stock Price Activity: Costco Wholesale shares were down 2.95% at $997.87 at the time of publication on Tuesday, according to Benzinga Pro data.

Image via Shutterstock/ Tada Images