Costco Wholesale (NASDAQ:COST) Stock Rated Strong-Buy in New Coverage at TD Cowen

Key Points

• TD Cowen initiated coverage of Costco with a “strong-buy” rating. Costco has a consensus “Moderate Buy” rating and an average analyst price target of $1,086.19.
• Costco exceeded quarterly expectations, reporting $6.75 in EPS versus the $6.54 consensus estimate and $95.72 billion in revenue, up 11.1% year over year.
• The stock carries a premium valuation and potential downside risk. Shares trade at approximately 49 times earnings, while Costco continues expanding its store footprint and membership base to support long-term growth.

Equities researchers at TD Cowen started coverage on shares of Costco Wholesale (NASDAQ:COST - Get Free Report) in a note issued to investors on Friday, Zacks reports. The firm set a "strong-buy" rating on the retailer's stock.

COST has been the topic of several other research reports. Evercore restated an "outperform" rating on shares of Costco Wholesale in a research report on Tuesday, September 22nd. Tigress Financial raised their target price on Costco Wholesale from $1,065.00 to $1,250.00 and gave the stock a "buy" rating in a research note on Thursday, October 15th. BTIG Research reiterated a "buy" rating and issued a $1,125.00 target price on shares of Costco Wholesale in a report on Wednesday, September 23rd. Freedom Broker dropped their price target on Costco Wholesale from $1,030.00 to $1,010.00 and set a "buy" rating on the stock in a research note on Friday, September 25th. Finally, Guggenheim restated a "neutral" rating on shares of Costco Wholesale in a report on Monday, September 28th. One investment analyst has rated the stock with a Strong Buy rating, twenty-four have given a Buy rating, eight have given a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $1,086.19.

Costco Wholesale Stock Performance

Shares of COST opened at $1,012.28 on Friday. The company has a current ratio of 1.06, a quick ratio of 0.62 and a debt-to-equity ratio of 0.11. The stock has a market capitalization of $448.57 billion, a P/E ratio of 48.76, a price-to-earnings-growth ratio of 4.26 and a beta of 0.88. The firm's fifty day simple moving average is $943.31 and its two-hundred day simple moving average is $970.25. Costco Wholesale has a 12 month low of $844.06 and a 12 month high of $1,096.50.

Costco Wholesale (NASDAQ:COST - Get Free Report) last issued its quarterly earnings results on Thursday, September 24th. The retailer reported $6.75 earnings per share for the quarter, topping analysts' consensus estimates of $6.54 by $0.21. Costco Wholesale had a return on equity of 27.60% and a net margin of 3.04%. The firm had revenue of $95.72 billion during the quarter, compared to the consensus estimate of $94.97 billion. During the same period last year, the business posted $5.87 EPS. The business's revenue was up 11.1% compared to the same quarter last year. As a group, analysts predict that Costco Wholesale will post 22.70 EPS for the current year.

Insider Buying and Selling

In related news, EVP William Richard Wilcox sold 1,100 shares of the stock in a transaction that occurred on Tuesday, October 13th. The stock was sold at an average price of $958.21, for a total transaction of $1,054,031.00. Following the completion of the sale, the executive vice president directly owned 3,094 shares of the company's stock, valued at approximately $2,964,701.74. This trade represents a 26.23% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Claudine Adamo sold 2,200 shares of the stock in a transaction that occurred on Tuesday, September 29th. The shares were sold at an average price of $915.93, for a total value of $2,015,046.00. Following the sale, the executive vice president directly owned 7,134 shares of the company's stock, valued at $6,534,244.62. The trade was a 23.57% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 0.10% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Basso Capital Management L.P. purchased a new stake in Costco Wholesale in the third quarter worth about $497,000. Caldwell Trust Co boosted its position in Costco Wholesale by 2.1% during the 3rd quarter. Caldwell Trust Co now owns 16,941 shares of the retailer's stock valued at $15,422,000 after acquiring an additional 349 shares in the last quarter. 3Chopt Investment Partners LLC grew its holdings in shares of Costco Wholesale by 11.5% during the 3rd quarter. 3Chopt Investment Partners LLC now owns 1,827 shares of the retailer's stock worth $1,663,000 after acquiring an additional 188 shares during the period. Trace Wealth Advisors LLC grew its holdings in shares of Costco Wholesale by 0.4% during the 3rd quarter. Trace Wealth Advisors LLC now owns 2,758 shares of the retailer's stock worth $2,511,000 after acquiring an additional 10 shares during the period. Finally, Compass Financial Management LLC grew its holdings in shares of Costco Wholesale by 2.3% during the 3rd quarter. Compass Financial Management LLC now owns 4,896 shares of the retailer's stock worth $4,457,000 after acquiring an additional 109 shares during the period. Institutional investors own 68.48% of the company's stock.

Key Costco Wholesale News

Here are the key news stories impacting Costco Wholesale this week:

• Positive Sentiment: Store expansion supports long-term growth. Costco plans to open 13 locations by the end of 2026, potentially expanding its membership base and sales footprint. Costco opening 13 locations by end of 2026
• Positive Sentiment: Membership acquisition remains a focus. A promotional offer providing new members with a $45 gift card could help drive sign-ups ahead of the holiday shopping season, supporting recurring membership-fee revenue. Costco membership Black Friday deal
• Positive Sentiment: Analysts expect continued earnings momentum. Costco’s upcoming fiscal first-quarter 2027 report is expected to show double-digit year-over-year EPS growth. Its latest quarter also beat consensus estimates on both earnings and revenue. What to expect from Costco Wholesale’s next quarterly earnings report
• Positive Sentiment: Customer loyalty and digital engagement remain strengths. Coverage highlights near-record renewal rates, busy warehouses, a younger shopper base and growing use of Costco’s digital channels. These factors reinforce the company’s competitive advantages and long-term sales potential. The New Costco Shopper Is Under 40
• Neutral Sentiment: Healthcare partnerships could deepen member engagement. Integrations with NationsBenefits and SCAN Health Plan are expanding Costco’s role in Medicare-related spending across more than 600 U.S. warehouses, though the financial contribution is not yet clear. Medicare push and Costco investors
• Negative Sentiment: Valuation leaves little room for disappointment. Costco trades at roughly 49 times earnings, making execution and upcoming results especially important. Analysts remain positive, but the stock’s premium valuation could amplify downside if growth slows. Costco stock’s long-term competitive advantages

Costco Wholesale Company Profile

Costco Wholesale Corporation operates a membership-based warehouse retail business under the Costco name. The company sells merchandise in bulk and at competitive prices through warehouse clubs and e-commerce platforms, serving individual consumers, businesses and other organizations.

Its product selection includes groceries and fresh foods, household supplies, appliances, electronics, furniture, apparel, health and beauty products, jewelry, automotive products and prescription drugs. Costco also provides services such as optical care, pharmacy services, hearing-aid sales, travel offerings and fuel sales, depending on location.

The company traces its roots to Price Club, which opened in San Diego in 1976.

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