Costco Wholesale (NASDAQ:COST) Shares Down 1.9% - Time to Sell?

Key Points

• Costco shares fell 1.9% to about $955, below the 200-day moving average, while the stock trades at a high valuation of roughly 48 times earnings and a 0.6% dividend yield.
• Analysts remain broadly bullish, with a “Moderate Buy” consensus from 35 analysts and an average price target of $1,059.07, supported by Costco’s customer loyalty, resilient business model and potential gasoline-sales growth.
• Recent results were mixed: quarterly revenue exceeded estimates, but EPS narrowly missed expectations. The company also faces modest legal and reputational risks from an email-settlement agreement and allegations involving a chicken supplier.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shares were down 1.9% during mid-day trading on Thursday . The stock traded as low as $949.68 and last traded at $955.1740. Approximately 2,305,715 shares were traded during mid-day trading, an increase of 3% from the average daily volume of 2,242,850 shares. The stock had previously closed at $974.03.

Trending Headlines about Costco Wholesale

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

• Positive Sentiment: A new gasoline-sales experiment could create an additional growth engine for Costco and potentially strengthen customer traffic, membership economics and fuel-related revenue over time. The article characterizes the initiative as potentially transformative, although the financial impact remains uncertain. Costco: A New Experiment With Gasoline Sales Could Fundamentally Transform the Company
• Positive Sentiment: Analysts continue to view COST as a strong momentum stock, supported by its resilient operating model, customer loyalty and long-term earnings growth. This may help sustain investor interest despite the premium valuation. Why Costco Is a Strong Momentum Stock
• Positive Sentiment: Costco’s partnership with Coco5 will add a new athlete-backed hydration product to its stores, providing potential incremental sales and reinforcing the retailer’s health-focused merchandising strategy. Coco5 Signs Retail Partnership With Costco
• Positive Sentiment: The Federal Reserve’s decision to hold interest rates steady, together with renewed demand for defensive dividend stocks, may support Costco’s appeal as a relatively stable retailer. Fed Holds Rates and Implications for Costco
• Neutral Sentiment: Costco’s fully off-grid Florida distribution center, powered by solar and batteries, supports sustainability goals and could reduce long-term energy exposure, but the near-term earnings effect appears limited. Costco Runs Florida Distribution Center Off the Grid
• Negative Sentiment: Costco agreed to a $14 million settlement over allegations that promotional emails used misleading expiration language. Although the company denied wrongdoing, the settlement creates modest legal costs and possible reputational risk. Costco’s $14 Million Email Settlement
• Negative Sentiment: An animal-rights investigation alleged serious mistreatment and biosecurity violations at an organic chicken supplier connected to Costco. The allegations could increase supply-chain scrutiny and reputational risk, though no direct financial impact has been established. Investigation Into Costco Chicken Supplier

Analysts Set New Price Targets

COST has been the topic of a number of recent analyst reports. Sanford C. Bernstein increased their price target on shares of Costco Wholesale from $1,192.00 to $1,194.00 and gave the stock an "outperform" rating in a research note on Friday, May 29th. TD Cowen reissued a "buy" rating and set a $1,175.00 price objective on shares of Costco Wholesale in a research note on Wednesday, June 3rd. Bank of America upped their price objective on Costco Wholesale from $1,185.00 to $1,200.00 and gave the stock a "buy" rating in a report on Friday, May 29th. Guggenheim reaffirmed a "neutral" rating on shares of Costco Wholesale in a research report on Monday, June 1st. Finally, Weiss Ratings cut Costco Wholesale from a "buy (b)" rating to a "buy (b-)" rating in a report on Tuesday, June 23rd. Twenty-two equities research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Costco Wholesale presently has a consensus rating of "Moderate Buy" and an average target price of $1,059.07.

Costco Wholesale Trading Down 1.9%

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 business's 50-day simple moving average is $958.85 and its two-hundred day simple moving average is $982.10. The stock has a market capitalization of $423.60 billion, a price-to-earnings ratio of 48.05, a PEG ratio of 4.67 and a beta of 0.88.

Costco Wholesale (NASDAQ:COST - Get Free Report) last released its quarterly earnings data on Thursday, May 28th. The retailer reported $4.93 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.94 by ($0.01). The business had revenue of $70.53 billion during the quarter, compared to analyst estimates of $70.12 billion. Costco Wholesale had a return on equity of 28.04% and a net margin of 3.01%.During the same period in the previous year, the company earned $4.28 EPS. On average, research analysts anticipate that Costco Wholesale Corporation will post 20.42 earnings per share for the current fiscal year.

Costco Wholesale Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, August 7th. Investors of record on Friday, July 24th will be issued a $1.47 dividend. This represents a $5.88 annualized dividend and a yield of 0.6%. The ex-dividend date is Friday, July 24th. Costco Wholesale's dividend payout ratio is currently 29.58%.

Insider Buying and Selling

In other Costco Wholesale news, Director Kenneth D. Denman sold 885 shares of the business's stock in a transaction dated Tuesday, June 23rd. The stock was sold at an average price of $957.45, for a total transaction of $847,343.25. Following the transaction, the director owned 4,779 shares in the company, valued at $4,575,653.55. The trade was a 15.62% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. 0.10% of the stock is owned by company insiders.

Institutional Investors Weigh In On Costco Wholesale

A number of large investors have recently modified their holdings of COST. Gunpowder Capital Management LLC dba Oliver Wealth Management acquired a new position in shares of Costco Wholesale during the fourth quarter worth $27,000. Lifetime Wealth Management P.C. acquired a new stake in Costco Wholesale during the 4th quarter valued at $28,000. Mcguire Capital Advisors Inc. acquired a new stake in Costco Wholesale during the 4th quarter valued at $28,000. Entrust Financial LLC purchased a new stake in Costco Wholesale during the 4th quarter worth $31,000. Finally, Joseph Group Capital Management purchased a new stake in Costco Wholesale during the 4th quarter worth $33,000. Institutional investors and hedge funds own 68.48% of the company's stock.

Costco Wholesale Company Profile

Costco Wholesale Corporation operates a global chain of membership-only warehouse clubs that sell a wide array of merchandise in bulk at discounted prices. The company's product mix includes groceries, fresh and frozen food, household goods, electronics, apparel, and seasonal items, augmented by its prominent private-label brand, Kirkland Signature. Costco's business model centers on annual membership fees and high-volume, low-margin sales, designed to drive repeat purchasing and strong customer loyalty among both consumers and small-business buyers.

Beyond merchandise, Costco provides a range of ancillary services that complement its warehouses, including gasoline stations, pharmacy and optical services, hearing aid centers, photo services, and travel and insurance products.

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