Jefferies Financial Group Issues Pessimistic Forecast for Costco Wholesale (NASDAQ:COST) Stock Price

Key Points

• Jefferies cut Costco’s price target from $1,130 to $1,100, though the new target still implies 19.21% upside. Overall analyst sentiment remains “Moderate Buy,” with a consensus target of $1,045.67.
• Costco exceeded quarterly expectations, reporting $6.75 in EPS versus $6.54 expected and $95.72 billion in revenue versus $94.97 billion forecast. Comparable sales rose 9.4%, while digitally enabled sales increased 19.5%.
• Valuation and membership growth remain concerns: Costco trades at an elevated earnings multiple, membership-fee growth has slowed, and a $184 million tariff refund boosted quarterly earnings by roughly $0.15 per share.

Costco Wholesale (NASDAQ:COST - Get Free Report) had its target price dropped by equities research analysts at Jefferies Financial Group from $1,130.00 to $1,100.00 in a research report issued to clients and investors on Friday. Jefferies Financial Group's target price indicates a potential upside of 19.21% from the stock's previous close.

Several other brokerages have also issued reports on COST. Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $1,091.00 price objective on shares of Costco Wholesale in a report on Friday, September 4th. Weiss Ratings cut Costco Wholesale from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Wednesday, September 2nd. HSBC raised Costco Wholesale to a "buy" rating in a research report on Friday. Guggenheim reiterated a "neutral" rating on shares of Costco Wholesale in a report on Monday, June 1st. Finally, JPMorgan Chase & Co. reduced their price objective on shares of Costco Wholesale from $1,100.00 to $1,015.00 and set an "overweight" rating on the stock in a report on Friday. Twenty-two research analysts have rated the stock with a Buy rating, ten have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $1,045.67.

Costco Wholesale Stock Performance

NASDAQ COST opened at $922.77 on Friday. Costco Wholesale has a 1-year low of $844.06 and a 1-year high of $1,096.50. The company has a market cap of $409.23 billion, a PE ratio of 44.45, a price-to-earnings-growth ratio of 3.76 and a beta of 0.86. The stock's 50 day simple moving average is $933.96 and its 200-day simple moving average is $967.86. The company has a debt-to-equity ratio of 0.17, a current ratio of 1.07 and a quick ratio of 0.61.

Costco Wholesale (NASDAQ:COST - Get Free Report) last issued its earnings results on Thursday, September 24th. The retailer reported $6.75 earnings per share for the quarter, topping the consensus estimate of $6.54 by $0.21. Costco Wholesale had a return on equity of 28.43% and a net margin of 3.04%.The business had revenue of $95.72 billion for the quarter, compared to analysts' expectations of $94.97 billion. As a group, equities research analysts anticipate that Costco Wholesale will post 22.5 EPS for the current fiscal year.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the company. C M Bidwell & Associates Ltd. acquired a new position in shares of Costco Wholesale during the 2nd quarter worth $28,000. Gunpowder Capital Management LLC dba Oliver Wealth Management acquired a new stake in shares of Costco Wholesale during the fourth quarter valued at $27,000. Burk Holdings LLC purchased a new stake in Costco Wholesale during the 2nd quarter worth about $30,000. Manning & Napier Advisors LLC purchased a new position in Costco Wholesale in the 2nd quarter valued at about $30,000. Finally, Lifetime Wealth Management P.C. acquired a new stake in shares of Costco Wholesale during the 4th quarter worth about $28,000. 68.48% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting Costco Wholesale

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

• Positive Sentiment: Quarterly beat and resilient demand: Costco reported $6.75 in adjusted EPS versus a $6.54 consensus estimate and revenue of $95.72 billion versus expectations of $94.97 billion. Net income rose 14.9% year over year, while comparable sales increased 9.4%, reflecting continued demand for essential goods amid economic uncertainty. Costco fourth-quarter earnings
• Positive Sentiment: Digital and membership engagement remain healthy: Digitally enabled comparable sales surged 19.5%, supported by broad-based gains across categories. Costco also highlighted younger members, strong renewal rates and plans to accelerate digital investment. Costco Q4 earnings call highlights
• Positive Sentiment: Expansion supports the long-term growth story: Management plans to open 33 new warehouses in fiscal 2027, while pharmacy, gasoline and international operations contributed to the latest results. Analysts including Goldman Sachs, UBS and Bernstein remain constructive, despite adjusting some price targets. Costco expansion plans
• Neutral Sentiment: Tariff refunds boosted earnings: A $184 million tariff refund contributed approximately $0.15 per share to fourth-quarter EPS. Costco said most of the money will be reinvested in lower prices for produce, meat, beverages and other merchandise, which may support customer loyalty but makes the earnings beat less reflective of recurring profitability. Costco tariff refunds
• Negative Sentiment: Membership growth is the key concern: Analysts noted that membership-fee growth has slowed significantly. Because recurring membership income is central to Costco’s valuation and future guidance, investors may require continued gains in members and renewal rates to justify the stock’s elevated earnings multiple.
• Negative Sentiment: Valuation and cost pressures temper enthusiasm: With a price-to-earnings ratio above 46, some analysts argue that much of Costco’s execution is already priced in. Rising memory-component costs also led to a $152 million electronics-related charge, while several firms lowered price targets following the report. Costco valuation analysis

Costco Wholesale Company Profile

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally competitive prices. Its product range includes groceries, fresh foods, apparel, appliances, electronics, furniture, jewelry, hardware, and seasonal goods, along with private-label products sold under the Kirkland Signature brand.

The company also provides a variety of ancillary services, including gasoline stations, pharmacies, optical centers, hearing-aid centers, food courts, tire centers, and travel services.

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