Costco Wholesale (NASDAQ:COST) Trading Down 2.2% - Time to Sell?

Key Points

• Costco shares fell 2.2% on Thursday, trading lower alongside other big-box retailers after Walmart’s disappointing earnings and guidance raised concerns about consumer spending trends.
• Despite the pullback, Wall Street remains broadly optimistic: several analysts raised price targets, and the consensus rating is still Moderate Buy with a target price around $1,052.60.
• Costco’s fundamentals remain solid, with the company recently beating quarterly EPS and revenue estimates and also increasing its dividend from $1.30 to $1.47 per share.

Shares of Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) dropped 2.2% on Thursday . The company traded as low as $1,039.01 and last traded at $1,050.45. Approximately 2,146,280 shares were traded during trading, an increase of 2% from the average daily volume of 2,099,930 shares. The stock had previously closed at $1,074.01.

Costco Wholesale News Summary

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

• Positive Sentiment: Several outlets highlighted Costco’s strong underlying business, with analysts and commentators pointing to solid membership renewals, resilient traffic, and the company’s ability to outperform peers in a challenging retail environment. Costco Expected to Deliver Strong Q3 Results Despite Macro Pressures, UBS Says
• Positive Sentiment: UBS raised its price target on Costco and kept a buy rating, reinforcing Wall Street’s bullish long-term view. UBS Adjusts Price Target on Costco Wholesale to 1,275 From 1,205, Maintains Buy Rating
• Positive Sentiment: Higher gas prices may be sending more shoppers to warehouse clubs like Costco for discounted fuel and value shopping, which could support traffic trends. Higher Gas Prices Have Consumers Visiting Costco, Sam's Club More: What The Data Shows
• Neutral Sentiment: Costco continues to attract attention ahead of its May 28 earnings report, with some previews saying the company may not need a blowout quarter to stay on track, but the bar for results remains high. Costco (COST) Doesn’t Need a Blowout Q3. Steady Renewals May Be Enough
• Negative Sentiment: Costco is being dragged lower in sympathy with Walmart after Walmart’s earnings and guidance disappointed investors, raising concerns about consumer spending trends across big-box retailers. Walmart Is Getting Slammed Today. Should You Sell WMT Stock Along With Target and Costco?
• Negative Sentiment: Some articles suggest Costco’s valuation is already rich and leaves limited room for disappointment, which may be prompting traders to take profits before earnings. Costco Q3 Earnings Preview: Great Business With Limited Upside
• Negative Sentiment: Costco also faces a legal overhang from a reported tax-related dispute in Japan, though this looks less material than the broader retail sympathy move. Costco hit with 1.5 billion yen tab for undeclared consumption tax

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on COST. Oppenheimer upped their target price on Costco Wholesale from $1,100.00 to $1,160.00 and gave the stock an "outperform" rating in a research report on Tuesday. Mizuho raised their target price on Costco Wholesale from $1,065.00 to $1,100.00 and gave the company an "outperform" rating in a research note on Thursday, April 16th. Telsey Advisory Group increased their price target on Costco Wholesale from $1,125.00 to $1,135.00 and gave the company an "outperform" rating in a report on Thursday, April 9th. DA Davidson reissued a "neutral" rating and issued a $1,000.00 price target on shares of Costco Wholesale in a report on Friday, April 10th. Finally, Deutsche Bank Aktiengesellschaft upped their target price on Costco Wholesale from $1,104.00 to $1,106.00 and gave the company a "buy" rating in a research report on Thursday, May 7th. Twenty-two research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $1,052.60.

Costco Wholesale Stock Down 2.2%

The company has a debt-to-equity ratio of 0.18, a current ratio of 1.06 and a quick ratio of 0.59. The firm's 50-day moving average price is $1,006.08 and its 200 day moving average price is $958.67. The firm has a market cap of $466.03 billion, a P/E ratio of 54.63, a PEG ratio of 5.38 and a beta of 0.92.

Costco Wholesale (NASDAQ:COST - Get Free Report) last issued its quarterly earnings results on Wednesday, March 11th. The retailer reported $4.58 EPS for the quarter, topping the consensus estimate of $4.55 by $0.03. Costco Wholesale had a net margin of 2.99% and a return on equity of 28.57%. The business had revenue of $69.60 billion for the quarter, compared to analysts' expectations of $68.96 billion. During the same quarter last year, the company posted $4.02 earnings per share. The company's quarterly revenue was up 9.2% compared to the same quarter last year. On average, equities research analysts expect that Costco Wholesale Corporation will post 20.33 earnings per share for the current fiscal year.

Costco Wholesale Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, May 15th. Shareholders of record on Friday, May 1st were issued a $1.47 dividend. This is a boost from Costco Wholesale's previous quarterly dividend of $1.30. This represents a $5.88 dividend on an annualized basis and a yield of 0.6%. The ex-dividend date of this dividend was Friday, May 1st. Costco Wholesale's dividend payout ratio is presently 30.58%.

Insider Buying and Selling

In other Costco Wholesale news, EVP Claudine Adamo sold 730 shares of Costco Wholesale stock in a transaction on Monday, March 9th. The shares were sold at an average price of $1,003.02, for a total value of $732,204.60. Following the completion of the transaction, the executive vice president owned 6,121 shares of the company's stock, valued at $6,139,485.42. The trade was a 10.66% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this link. 0.10% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of COST. Essential Partners LLC boosted its position in Costco Wholesale by 903.7% during the 1st quarter. Essential Partners LLC now owns 271 shares of the retailer's stock valued at $270,000 after purchasing an additional 244 shares during the period. BankChampaign National Association acquired a new position in Costco Wholesale during the 1st quarter valued at approximately $1,416,000. SHUTTLEWORTH & Co boosted its position in Costco Wholesale by 0.4% during the 1st quarter. SHUTTLEWORTH & Co now owns 2,442 shares of the retailer's stock valued at $2,433,000 after purchasing an additional 10 shares during the period. Leigh Baldwin & CO. LLC lifted its stake in Costco Wholesale by 8.2% in the first quarter. Leigh Baldwin & CO. LLC now owns 842 shares of the retailer's stock valued at $839,000 after buying an additional 64 shares during the last quarter. Finally, TrueWealth Financial Partners bought a new stake in Costco Wholesale in the first quarter valued at $805,000. 68.48% of the stock is currently owned by 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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