Core Viewpoint - U.S. stock futures are trading lower, with several companies reporting earnings that may influence investor sentiment today [1] Company Summaries - **Ciena Corp. (NYSE:CIEN)**: Expected to report quarterly earnings of $0.77 per share on revenue of $1.28 billion. Shares rose 1.2% to $224.50 in after-hours trading [1] - **Oracle Corp. (NYSE:ORCL)**: Reported second-quarter revenue of $16.06 billion, missing estimates of $16.21 billion. Adjusted earnings grew 54% year-over-year to $2.26 per share, exceeding estimates of $1.64 per share. Shares dipped 11.5% to $197.30 in after-hours trading [1] - **Broadcom Inc. (NASDAQ:AVGO)**: Analysts expect quarterly earnings of $1.86 per share on revenue of $17.1491 billion. Shares fell 0.8% to $409.70 in after-hours trading [1] - **Adobe Inc. (NASDAQ:ADBE)**: Reported better-than-expected fourth-quarter earnings and projected fiscal 2026 GAAP EPS of $17.90 to $18.10, surpassing the $16.56 analyst estimate. Shares slipped 0.8% to $340.40 in after-hours trading [1] - **Costco Wholesale Corp. (NASDAQ:COST)**: Expected to report quarterly earnings of $4.28 per share on revenue of $67.17 billion. Shares gained 0.1% to $875.28 in after-hours trading [1]

Core Viewpoint - A decline in membership renewal rates and rising concerns regarding operating costs are negatively impacting the retailer's outlook after a period of strong performance [1] Group 1 - Membership renewal rates have dipped, indicating potential challenges in customer retention [1] - There are increasing concerns about operating costs, which may affect profitability and operational efficiency [1] - The retailer has experienced years of significant outperformance, but current trends suggest a shift in this trajectory [1]

Core Viewpoint - Costco's recent stock performance has lagged behind the broader market, but a deeper analysis reveals that it has outperformed over the long term [1]. Short-Term Performance - An investment of $10,000 in Costco stock six months ago would have decreased to $8,769, reflecting a total return of negative-12.3% and an annualized return of negative-22.8% [2]. - In contrast, a similar investment in the S&P 500 index would have grown to $11,480, while the Nasdaq-100 index would have reached $11,820 [3]. Long-Term Performance - Over a three-year period, Costco investors have outperformed the S&P 500, although keeping pace with the Nasdaq-100 during the AI boom has been more challenging [5]. - If the investment in Costco stock was held for five years, it would have outperformed both the S&P 500 and the Nasdaq-100 [8]. Valuation and Economic Environment - Costco's stock was trading at a high valuation of 95 times free cash flow (FCF) in spring 2025, but has since decreased to a multiple of 50, which is still considered high for value investors [10]. - The company faces challenges from increasing operating costs due to tariffs and inflation, impacting its low-margin warehouse retail model [11]. Financial Performance and Investor Sentiment - Despite the stock's price dip, Costco's financial results are strong, with trailing-12-month sales up 19% compared to three years ago and FCF nearly tripling [13]. - Supporters of Costco view the current price dip as a buying opportunity, emphasizing the company's resilience in various economic conditions [14].

Core Viewpoint - Costco Wholesale Corporation is expected to report first-quarter financial results, with a focus on the impact of tariffs on its business operations [1][8]. Earnings Estimates - Analysts predict Costco will report first-quarter revenue of $67.17 billion, an increase from $62.15 billion in the same quarter last year [1]. - Expected earnings per share (EPS) for the first quarter is $4.28, up from $3.82 in the previous year [2]. Recent Performance - Costco has exceeded revenue estimates for three consecutive quarters and for six out of the last ten quarters [2]. - The company has also beaten EPS estimates in two straight quarters and in eight of the last ten quarters [2]. Expert Opinions - Concerns regarding membership growth and margin pressure are noted to be modest, while tariff issues are significant [3]. - Rising merchandise costs and consumer spending dynamics may lead to persistent margin pressure due to inflation or tariffs [4]. - Analysts have mixed views on Costco's performance, with some maintaining an Overweight rating while adjusting price targets [5][6]. Key Items to Watch - Tariffs are a primary concern for investors, especially in light of Costco's lawsuit challenging the authority to impose tariffs [8]. - The company's strategy to mitigate tariff impacts includes increasing production of its Kirkland Signature brand items [8]. - Recent traffic reports indicate a year-over-year increase in foot traffic, with a 6.0% rise in the third calendar quarter [9]. Stock Performance - Costco's stock is trading at $874.49, down 3.9% year-to-date, within a 52-week range of $871.09 to $1,078.24 [11].

Core Insights - Costco Wholesale is set to announce earnings on December 11, 2025, with a market capitalization of $394 billion and revenue of $275 billion over the past 12 months, resulting in an operating profit of $10 billion and net income of $8.1 billion [3]. Historical Performance - Over the past five years, Costco has recorded 19 earnings data points, yielding 12 positive and 7 negative one-day (1D) returns, resulting in a positive return rate of approximately 63%. This rate decreases to 55% when examining the last three years [9]. - The median of the 12 positive returns is 2.4%, while the median of the 7 negative returns is -2.4% [9]. Trading Strategies - Two approaches are suggested for event-driven trading: familiarizing with historical odds and positioning ahead of the earnings announcement, or observing the relationship between immediate and medium-term returns post-earnings to inform positioning after results are disclosed [4]. - A low-risk strategy involves understanding the correlation between short-term (1D) and medium-term (5D) returns post-earnings, allowing traders to take a "long" position for the subsequent 5 days if the 1D post-earnings return is positive [6]. Peer Comparison - The performance of peers can influence post-earnings stock reactions, with historical data showing Costco's stock performance compared to peers reporting earnings just prior [7]. - For smoother investment options, the Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has consistently outperformed benchmarks like the S&P 500, S&P mid-cap, and Russell 2000 indices [8].

Company Overview - Costco Wholesale is set to announce its earnings on December 11, 2025, with a current market capitalization of $394 billion and revenue of $275 billion over the past twelve months [2] - The company reported operational profits of $10 billion and net income of $8.1 billion [2] Historical Performance - Over the past five years, Costco has recorded 19 earnings data points, resulting in 12 positive and 7 negative one-day (1D) returns, indicating a positive return rate of approximately 63% [8] - The positive return rate drops to 55% when analyzing data from the last three years [8] - The median of the 12 positive returns is 2.4%, while the median of the 7 negative returns is -2.4% [8] Earnings Reaction Strategy - A strategy to capitalize on earnings announcements involves understanding historical odds and positioning ahead of the announcement or observing immediate and medium-term returns post-earnings [3] - The correlation between short-term (1D) and medium-term (5D) returns can guide trading decisions, particularly if a strong correlation is identified [5] Peer Comparison - The performance of peers can influence Costco's post-earnings stock reactions, with historical data showing the relationship between Costco's stock performance and that of peers reporting earnings prior to Costco [6] - For smoother investment options, the Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has consistently outperformed benchmarks like the S&P 500, S&P mid-cap, and Russell 2000 indices [7]

Core Insights - Costco is set to release its quarterly earnings on December 11, 2025, with an estimated EPS of $4.25 and projected revenue of approximately $67.1 billion [1] - The company is showing strong sales figures and increasing memberships, with Q1 revenue estimated at $67.28 billion, an 8.3% increase from the previous year, and an EPS forecast reflecting an 11.3% rise [2] Financial Performance - Net sales for the quarter have risen by 8.2% to $65.98 billion, driven by robust comparable sales and a significant 20.5% growth in digital sales [2][3] - Costco's financial metrics include a price-to-earnings (P/E) ratio of approximately 48.71, a price-to-sales ratio of 1.43, and an enterprise value to sales ratio of 1.41, indicating strong investor confidence [4] - The company maintains a low debt-to-equity ratio of 0.28, suggesting financial stability [4][6] Strategic Initiatives - Costco's strategic initiatives, such as auto-renewal, digital outreach, and new perks like Instacart credits, have enhanced customer loyalty and contributed to steady sales and earnings growth [3] - The company's focus on membership growth has been pivotal in maintaining its market position [3] Investor Sentiment - Investors are closely monitoring Costco's upcoming earnings announcement, particularly due to the company's history of rewarding investors with reliable dividends [5] - Despite a rare decline in 2025, there is speculation about the possibility of another special dividend as Costco approaches the peak holiday shopping weeks [5]

Group 1 - Walmart has shown strong performance, breaking through the $110 resistance level recently, and is expected to continue its upward trend, with a target of $130 [2][3] - Costco, in contrast, has been in a topping formation for the last 18 months and is considered oversold in the short term, with a target around $800 [3][5] - The consumer sector is showing strength, as indicated by the XRT index reaching highs without contributions from Amazon or Costco, suggesting a robust consumer sentiment [4] Group 2 - Walmart's revenue growth is outpacing that of Costco, making it a more attractive investment option, especially if valuations were equal [8] - There are opportunities for investors to buy Walmart shares, particularly after a period of consolidation [9]

Core Insights - The Q3 earnings season has shown solid results, with a projected 13.4% increase in earnings per share for S&P 500 companies, marking the fourth consecutive quarter of double-digit earnings growth [2] - Analysts had initially expected a lower earnings growth of 7.9% for Q3, indicating a significant positive surprise in the actual results [3] Group 1: Company Earnings Reports - Oracle (ORCL) is one of the major companies yet to report its Q3 results, following a strong second quarter that showcased its leadership in AI and a substantial cloud backlog [1][4] - Specialty retailers such as GameStop (GME), AutoZone (AZO), and Chewy (CHWY) are expected to report their results soon, which will provide insights into consumer spending trends [4] - Adobe (ADBE) and Broadcom (AVGO) are also set to report their earnings next week, concluding the Q3 reporting season [5]

Costco - Costco's membership model drives consistent revenue with renewal rates consistently above 90%, providing cash flow stability that supports dividend growth, making it attractive for income investors [1][5] - The company demonstrates resilience in inflationary environments through its bulk-buying model and private-label Kirkland brand, which help maintain low costs and strong margins [1] - Cramer emphasizes Costco's ability to thrive amid economic shifts, including inflation and consumer caution, as a reason to invest, especially with its global expansion and e-commerce growth [1][2] Eli Lilly - Eli Lilly is recognized for its explosive growth and reliable dividend, currently yielding about 0.69%, driven by blockbuster drugs like Mounjaro and Zepbound for weight loss and diabetes [6][10] - The company maintains a strong innovation pipeline and profitability, which supports dividend growth, positioning it well to handle patent cliffs compared to peers [7] - Recent late-stage trial results for orforglipron, an oral formulation for weight loss and diabetes management, reported significant success, indicating strong future potential for the stock [8][9] CVS Health - CVS Health is highlighted for its diversified business model, which includes retail pharmacies, health insurance through Aetna, and pharmacy benefit management, with a dividend yield of 3.36% [11][12] - The company is considered undervalued with a low price-to-earnings ratio relative to peers, despite strong cash flows that support its generous dividend [12] - Cramer points out CVS's strategic shift toward healthcare services, such as in-store clinics and telehealth, as a growth driver in a post-pandemic environment, making it a buy for investors seeking income and recovery upside [12][13]