Costco Wholesale (NASDAQ:COST) Stock Rating Cut to Hold at Freedom Broker

Key Points

• Freedom Broker downgraded Costco to Hold from Buy but raised its price target to $1,050 from $1,010; that target implied 1.65% downside from the prior close.
• Analyst sentiment remains broadly positive: MarketBeat reports a consensus “Moderate Buy” rating and an average price target of $1,091.84.
• Costco beat quarterly estimates, reporting EPS of $6.75 versus $6.54 expected and revenue of $95.72 billion, up 11.1% year over year.

Costco Wholesale (NASDAQ:COST - Get Free Report) was downgraded by stock analysts at Freedom Broker from a "buy" rating to a "hold" rating in a report issued on Tuesday, Marketbeat.com reports. They presently have a $1,050.00 price target on the retailer's stock, up from their previous price target of $1,010.00. Freedom Broker's target price would suggest a potential downside of 1.65% from the stock's previous close.

Other research analysts have also issued reports about the stock. UBS Group reiterated a "buy" rating on shares of Costco Wholesale in a research note on Thursday, September 17th. Weiss Ratings downgraded shares of Costco Wholesale from a "buy (b)" rating to a "buy (b-)" rating in a research report on Wednesday, November 4th. BMO Capital Markets reaffirmed an "outperform" rating on shares of Costco Wholesale in a report on Friday, September 25th. Evercore reiterated an "outperform" rating on shares of Costco Wholesale in a research report on Tuesday, September 22nd. Finally, Sanford C. Bernstein cut their target price on Costco Wholesale from $1,144.00 to $1,143.00 and set an "outperform" rating for the company in a research note on Friday, September 25th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-three have issued a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $1,091.84.

Costco Wholesale Stock Performance

Shares of Costco Wholesale stock traded up $1.49 during trading hours on Tuesday, hitting $1,067.67. 545,313 shares of the company were exchanged, compared to its average volume of 2,206,281. 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 business has a 50-day moving average of $954.83 and a 200-day moving average of $972.91. Costco Wholesale has a 1 year low of $844.06 and a 1 year high of $1,096.50. The stock has a market capitalization of $473.12 billion, a price-to-earnings ratio of 51.39, a P/E/G ratio of 4.47 and a beta of 0.85.

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

Insiders Place Their Bets

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

Institutional Trading of Costco Wholesale

A number of institutional investors have recently modified their holdings of COST. Contravisory Investment Management Inc. raised its stake in shares of Costco Wholesale by 107.7% in the 3rd quarter. Contravisory Investment Management Inc. now owns 27 shares of the retailer's stock valued at $25,000 after acquiring an additional 14 shares during the period. C M Bidwell & Associates Ltd. purchased a new stake in Costco Wholesale during the 2nd quarter worth $28,000. Burk Holdings LLC purchased a new stake in Costco Wholesale during the 2nd quarter worth $30,000. Manning & Napier Advisors LLC acquired a new stake in Costco Wholesale in the 2nd quarter valued at $30,000. Finally, John Boyer Inc. purchased a new stake in Costco Wholesale during the 3rd quarter worth $32,000. Hedge funds and other 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: Costco’s digital sales rose 22.5% in October, outpacing store comparable sales. The growth points to continued member engagement and traction from online shopping and delivery efforts. Costco's Digital Sales Outpace Store Comps as Shopping Evolves
• Positive Sentiment: Costco reportedly overtook Kroger in a key grocery market-share ranking. Warehouse expansion, digital sales and partnerships are cited as factors drawing more food spending into Costco’s membership model. Costco just passed Kroger in a grocery ranking that matters
• Neutral Sentiment: A Bank of America analyst says members continued buying gas despite higher prices, suggesting resilient customer demand. The analyst also cautioned that this strength may already be reflected in COST’s valuation. Costco members are paying more for gas and filling up anyway
• Neutral Sentiment: Costco closed a 37-year-old California warehouse but opened a replacement nearby, suggesting a location transition rather than a broad pullback in its store network. Costco closes popular California store location after 37 years
• Negative Sentiment: Whipped cream sold at Costco was recalled over possible cleaning-chemical contamination. The report does not specify the recall’s scope, so the potential business impact is unclear. Whipped Cream Sold at Costco Recalled Over Possible Cleaning Chemical Contamination

Costco Wholesale Company Profile

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally low prices. Its products include groceries, fresh foods, appliances, electronics, apparel, furniture, and household goods, as well as its Kirkland Signature private-label line. The company also provides services such as gasoline stations, pharmacies, optical and hearing-aid centers, food courts, and travel offerings. Costco serves members through warehouses and online channels.

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