JPMorgan Chase & Co. Has Lowered Expectations for Costco Wholesale (NASDAQ:COST) Stock Price

Key Points

• JPMorgan lowered Costco’s price target from $1,100 to $1,015 but maintained an “overweight” rating, implying 10.42% potential upside from the prior close.
• Costco exceeded quarterly expectations, reporting $6.75 in EPS versus $6.54 expected and revenue of $95.72 billion versus $94.97 billion forecast. Comparable sales rose 9.4%, while digitally enabled comparable sales increased 19.5%.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and average target of $1,047.42, although Costco’s premium valuation, a one-time tariff refund benefit and rising electronics costs could pressure future returns.

Costco Wholesale (NASDAQ:COST - Get Free Report) had its price target lowered by equities research analysts at JPMorgan Chase & Co. from $1,100.00 to $1,015.00 in a note issued to investors on Friday, Benzinga reports. The brokerage presently has an "overweight" rating on the retailer's stock. JPMorgan Chase & Co.'s price objective indicates a potential upside of 10.42% from the stock's previous close.

A number of other brokerages have also recently issued reports on COST. Oppenheimer reiterated an "outperform" rating and set a $1,160.00 target price on shares of Costco Wholesale in a research report on Wednesday, September 16th. Truist Financial boosted their target price on Costco Wholesale from $977.00 to $1,011.00 and gave the stock a "hold" rating in a report on Friday, May 29th. Mizuho reduced their price objective on Costco Wholesale from $1,100.00 to $1,065.00 and set an "outperform" rating on the stock in a research note on Friday. HC Wainwright restated a "buy" rating on shares of Costco Wholesale in a report on Monday, June 1st. Finally, Raymond James Financial restated an "outperform" rating and issued a $1,050.00 price objective on shares of Costco Wholesale in a research report on Friday. Twenty-three investment analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $1,047.42.

Costco Wholesale Price Performance

Shares of COST traded up $22.73 during mid-day trading on Friday, reaching $919.21. The company had a trading volume of 1,336,827 shares, compared to its average volume of 2,178,490. The company has a debt-to-equity ratio of 0.17, a current ratio of 1.07 and a quick ratio of 0.61. The company has a market capitalization of $407.65 billion, a P/E ratio of 46.30, a P/E/G ratio of 3.78 and a beta of 0.86. Costco Wholesale has a twelve month low of $844.06 and a twelve month high of $1,096.50. The company's 50-day moving average is $934.32 and its 200-day moving average is $968.18.

Costco Wholesale (NASDAQ:COST - Get Free Report) last announced its quarterly earnings results on Thursday, September 24th. The retailer reported $6.75 EPS for the quarter, beating the consensus estimate of $6.54 by $0.21. Costco Wholesale had a return on equity of 28.04% and a net margin of 3.01%.The business had revenue of $95.72 billion for the quarter, compared to analyst estimates of $94.97 billion. On average, equities analysts anticipate that Costco Wholesale will post 20.42 EPS for the current year.

Hedge Funds Weigh In On Costco Wholesale

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in COST. QRG Capital Management Inc. raised its position in shares of Costco Wholesale by 42.0% in the 2nd quarter. QRG Capital Management Inc. now owns 117,027 shares of the retailer's stock valued at $109,475,000 after acquiring an additional 34,608 shares during the period. Envestnet Portfolio Solutions Inc. grew its holdings in Costco Wholesale by 49.6% during the second quarter. Envestnet Portfolio Solutions Inc. now owns 21,023 shares of the retailer's stock valued at $19,666,000 after purchasing an additional 6,969 shares during the period. Envestnet Asset Management Inc. increased its stake in Costco Wholesale by 68.9% in the second quarter. Envestnet Asset Management Inc. now owns 1,042,046 shares of the retailer's stock valued at $974,803,000 after purchasing an additional 424,982 shares in the last quarter. State Street Corp increased its stake in Costco Wholesale by 31.7% in the second quarter. State Street Corp now owns 23,901,594 shares of the retailer's stock valued at $22,359,224,000 after purchasing an additional 5,749,362 shares in the last quarter. Finally, Silicon Valley Capital Partners raised its holdings in Costco Wholesale by 2.3% in the second quarter. Silicon Valley Capital Partners now owns 12,243 shares of the retailer's stock worth $11,419,000 after purchasing an additional 271 shares during the period. Institutional investors own 68.48% of the company's stock.

Key Headlines Impacting Costco Wholesale

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

• Positive Sentiment: Costco reported fourth-quarter EPS of $6.75 versus the $6.54 consensus estimate and revenue of $95.72 billion versus $94.97 billion expected. Net income rose 14.9% to approximately $3 billion. Costco earnings beat expectations
• Positive Sentiment: Underlying demand remained healthy, with fourth-quarter comparable sales increasing 9.4% and digitally enabled comparable sales jumping 19.5%. Strong traffic, pharmacy sales and e-commerce momentum support the company’s growth outlook. Costco beats quarterly sales estimates
• Positive Sentiment: Several analysts remain bullish. Mizuho lowered its target to $1,065 while retaining an Outperform rating, and Bernstein set a $1,143 target with the same rating. UBS also maintained a $1,275 Buy target, implying substantial upside from the reference price.
• Neutral Sentiment: The earnings beat included a roughly $0.15-per-share benefit from IEEPA tariff refunds, meaning some of the upside was non-recurring. Costco’s reported $6.75 EPS therefore may overstate the quarter’s sustainable earnings power. Costco posts fourth-quarter net income rise
• Negative Sentiment: Costco’s premium valuation remains a major obstacle: shares trade at roughly 45 times earnings despite a market capitalization near $398 billion. Analysts warn that slowing membership growth and the eventual fading benefit of the 2024 membership-fee increase could limit further multiple expansion.
• Negative Sentiment: Management flagged rising electronics costs tied to memory inflation, creating potential margin pressure. This, combined with the one-time tariff benefit and elevated valuation, helps explain why the stock’s earnings reaction has been weaker than the headline results might suggest. Costco flags rising electronics costs

About Costco Wholesale

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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