Costco Wholesale (NASDAQ:COST) Shares Up 1.1% - Here's Why

Key Points

• Costco shares rose 1.1% on Monday, trading as high as $930.98 as volume came in above average at about 2.37 million shares.
• RBC and other analysts remain broadly constructive on Costco’s business model and market-share gains, but several also warned that the stock’s rich valuation may limit upside from here.
• Recent fundamentals were mixed but solid: June sales and digital growth were strong, while the latest earnings slightly missed EPS expectations even as revenue topped estimates.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report)'s share price shot up 1.1% during trading on Monday . The stock traded as high as $930.98 and last traded at $926.43. Approximately 2,368,798 shares traded hands during mid-day trading, an increase of 5% from the average daily volume of 2,248,392 shares. The stock had previously closed at $916.25.

Key Headlines Impacting Costco Wholesale

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

• Positive Sentiment: RBC reiterated Costco as a top retail name, saying its “unique” model should keep driving market share gains and supporting the stock. Costco Wholesale to Sustain Market Share Gains on 'Unique' Model, RBC Capital Markets Says
• Positive Sentiment: June sales and digital growth were strong enough to reinforce the view that Costco still has healthy consumer demand behind it. Are Costco's June Sales Enough to Defend Its Rich Valuation?
• Neutral Sentiment: Wall Street research chatter and media coverage continue to spotlight Costco’s broad cultural appeal and pricing model, but these stories are not direct fundamental catalysts. Costco (COST) Stock Climbs as RBC Names Retailer a Top Industry Player Despite Hold Rating
• Negative Sentiment: RBC’s Hold/Sector Perform stance and comments about valuation suggest much of Costco’s strength may already be priced in, which could cap further gains. RBC says Costco is one of retail’s best stories, but flags rich valuation
• Negative Sentiment: Analysts also pointed to slowing comparable sales and softer membership growth as risks to Costco’s premium valuation. Are Costco's June Sales Enough to Defend Its Rich Valuation?

Analyst Ratings Changes

Several analysts have issued reports on COST shares. Guggenheim restated a "neutral" rating on shares of Costco Wholesale in a research note on Monday, June 1st. The Goldman Sachs Group boosted their price objective on Costco Wholesale from $1,088.00 to $1,159.00 and gave the company a "buy" rating in a research note on Friday, May 29th. HC Wainwright reiterated a "buy" rating on shares of Costco Wholesale in a research report on Monday, June 1st. Citigroup assumed coverage on shares of Costco Wholesale in a research report on Thursday, June 18th. They issued a "neutral" rating and a $1,020.00 price target on the stock. Finally, Oppenheimer raised their price objective on shares of Costco Wholesale from $1,100.00 to $1,160.00 and gave the stock an "outperform" rating in a report on Tuesday, May 19th. Twenty-two research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, Costco Wholesale has an average rating of "Moderate Buy" and an average price target of $1,059.07.

Costco Wholesale Stock Up 1.1%

The company has a quick ratio of 0.61, a current ratio of 1.07 and a debt-to-equity ratio of 0.17. The stock has a 50-day simple moving average of $983.66 and a two-hundred day simple moving average of $976.13. The firm has a market cap of $410.89 billion, a PE ratio of 46.61, a P/E/G ratio of 4.44 and a beta of 0.88.

Costco Wholesale (NASDAQ:COST - Get Free Report) last released its earnings results on Thursday, May 28th. The retailer reported $4.93 EPS for the quarter, missing the consensus estimate of $4.94 by ($0.01). Costco Wholesale had a net margin of 3.01% and a return on equity of 28.04%. The business had revenue of $70.53 billion for the quarter, compared to the consensus estimate of $70.12 billion. During the same period in the prior year, the business posted $4.28 EPS. Analysts expect that Costco Wholesale Corporation will post 20.38 earnings per share for the current year.

Costco Wholesale Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, August 7th. Stockholders of record on Friday, July 24th will be paid a dividend of $1.47 per share. The ex-dividend date of this dividend is Friday, July 24th. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. Costco Wholesale's payout ratio is presently 29.58%.

Insider Buying and Selling at Costco Wholesale

In other news, Director Kenneth D. Denman sold 885 shares of the firm's stock in a transaction that occurred on Tuesday, June 23rd. The stock was sold at an average price of $957.45, for a total value of $847,343.25. Following the completion of the transaction, the director owned 4,779 shares in the company, valued at $4,575,653.55. This trade represents a 15.62% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Company insiders own 0.10% of the company's stock.

Hedge Funds Weigh In On Costco Wholesale

A number of hedge funds have recently added to or reduced their stakes in the company. Brighton Jones LLC lifted its stake in Costco Wholesale by 12.3% during the 4th quarter. Brighton Jones LLC now owns 19,825 shares of the retailer's stock valued at $18,165,000 after acquiring an additional 2,172 shares during the period. Revolve Wealth Partners LLC raised its holdings in Costco Wholesale by 13.1% in the 4th quarter. Revolve Wealth Partners LLC now owns 1,123 shares of the retailer's stock worth $1,029,000 after purchasing an additional 130 shares during the period. Sivia Capital Partners LLC increased its position in Costco Wholesale by 4.5% in the second quarter. Sivia Capital Partners LLC now owns 3,853 shares of the retailer's stock worth $3,814,000 after buying an additional 165 shares in the last quarter. Pinnacle Wealth Planning Services Inc. raised its stake in Costco Wholesale by 1.1% during the 2nd quarter. Pinnacle Wealth Planning Services Inc. now owns 2,110 shares of the retailer's stock worth $2,089,000 after acquiring an additional 23 shares during the period. Finally, Schnieders Capital Management LLC. boosted its holdings in Costco Wholesale by 2.2% in the 2nd quarter. Schnieders Capital Management LLC. now owns 8,502 shares of the retailer's stock worth $8,416,000 after buying an additional 182 shares during the period. 68.48% of the stock is currently owned by hedge funds and other institutional investors.

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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