Costco Wholesale (NASDAQ:COST) Stock Price Down 4.6% on Analyst Downgrade

Key Points

• Costco shares fell 4.6% after JPMorgan Chase & Co. trimmed its price target slightly from $1,110 to $1,100, while keeping an overweight rating. The stock traded as low as $912.10 during the session.
• Despite the dip, analyst sentiment remains broadly positive: 22 analysts rate the stock a Buy, 11 Hold, and 1 Sell, with a consensus price target of $1,061.10. Several other firms recently raised their targets as well.
• Insider selling and recent earnings updates are also in focus. Director Kenneth D. Denman sold 885 shares, and Costco’s latest quarterly earnings slightly missed EPS estimates even as revenue came in above expectations.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shares traded down 4.6% during trading on Thursday after JPMorgan Chase & Co. lowered their price target on the stock from $1,110.00 to $1,100.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. Costco Wholesale traded as low as $912.10 and last traded at $909.15. 1,305,464 shares changed hands during mid-day trading, a decline of 41% from the average session volume of 2,227,662 shares. The stock had previously closed at $953.13.

Several other analysts have also issued reports on the company. Oppenheimer boosted their price target on Costco Wholesale from $1,100.00 to $1,160.00 and gave the company an "outperform" rating in a report on Tuesday, May 19th. The Goldman Sachs Group lifted their price objective on Costco Wholesale from $1,088.00 to $1,159.00 and gave the company a "buy" rating in a research report on Friday, May 29th. Deutsche Bank Aktiengesellschaft boosted their price objective on Costco Wholesale from $1,104.00 to $1,106.00 and gave the company a "buy" rating in a research note on Thursday, May 7th. BTIG Research reissued a "buy" rating and issued a $1,125.00 target price on shares of Costco Wholesale in a report on Friday, May 29th. Finally, Roth Capital raised their target price on shares of Costco Wholesale from $769.00 to $781.00 and gave the stock a "sell" rating in a research note on Friday, May 29th. Twenty-two analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus price target of $1,061.10.

Insider Buying and Selling

In related news, Director Kenneth D. Denman sold 885 shares of the business'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 transaction, the director directly owned 4,779 shares of the company's stock, valued at approximately $4,575,653.55. The trade was a 15.62% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Corporate insiders own 0.10% of the company's stock.

More Costco Wholesale News

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

• Positive Sentiment: Wall Street analysts remain constructive, with multiple Buy ratings reaffirmed and JPMorgan keeping an Overweight view while only trimming its price target slightly to $1,100. Costco (COST) Stock: Wall Street Maintains Confidence Despite June Sales Slowdown
• Positive Sentiment: June sales were still strong overall, with net sales up 10.6% year over year to $29.24 billion and digitally enabled comparable sales rising 20.9%, showing continued demand and e-commerce momentum. Costco Wholesale Corporation Reports June Sales Results and Announces Quarterly Cash Dividend
• Positive Sentiment: Costco also announced a quarterly dividend, reinforcing its appeal as a steady, cash-generating defensive retailer. Costco Wholesale Corporation Reports June Sales Results and Announces Quarterly Cash Dividend
• Neutral Sentiment: Analysts noted that traffic trends remain solid, but tougher summer comparisons could make near-term sales growth look less impressive. Costco (COST) Stock: Wall Street Maintains Confidence Despite June Sales Slowdown
• Neutral Sentiment: Investors also appear to be taking profits after a strong run, with the market focusing on the fact that some of the sales boost came from higher gasoline prices and foreign exchange rather than pure underlying demand. Costco’s June Sales Rise but Same Store Sales Growth Disappoints
• Negative Sentiment: A proposed class-action lawsuit alleging Costco sold protein powder contaminated with heavy metals is adding headline risk, even if it is unlikely to affect near-term fundamentals. Costco faces class-action lawsuit alleging protein powder was laced with toxic heavy metals

Hedge Funds Weigh In On Costco Wholesale

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

Costco Wholesale Stock Down 4.7%

The firm has a market cap of $402.87 billion, a P/E ratio of 45.75, a price-to-earnings-growth ratio of 4.59 and a beta of 0.88. The company's 50-day simple moving average is $986.93 and its 200 day simple moving average is $975.26. 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 announced its earnings results 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). 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 analysts' expectations of $70.12 billion. During the same quarter in the prior year, the company posted $4.28 earnings per share. Research analysts anticipate that Costco Wholesale Corporation will post 20.38 EPS for the current fiscal 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 given a dividend of $1.47 per share. The ex-dividend date of this dividend is Friday, July 24th. This represents a $5.88 annualized dividend and a dividend yield of 0.6%. Costco Wholesale's payout ratio is currently 29.58%.

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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