Costco Wholesale (NASDAQ:COST) Trading Down 4.2% on Analyst Downgrade

Key Points

• Costco shares fell 4.2% after JPMorgan Chase cut its price target slightly to $1,100 from $1,110, even while keeping an overweight rating. The stock traded down to $907.68 intraday on heavier-than-usual volume.
• Wall Street sentiment remains largely positive, with 22 analysts rating the stock a Buy, 11 Hold, and 1 Sell. The consensus price target is $1,061.10, despite some recent downgrades and valuation concerns.
• Insider selling added to the cautious tone as Director Kenneth D. Denman sold 885 shares worth about $847,343. Costco also recently reported strong June sales growth, but investors appear focused on slowing momentum and the stock’s rich valuation.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report)'s stock price fell 4.2% during mid-day 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 $907.68 and last traded at $912.97. 4,530,196 shares traded hands during mid-day trading, an increase of 101% from the average daily volume of 2,248,959 shares. The stock had previously closed at $953.13.

Several other equities research analysts also recently weighed in on COST. BTIG Research reaffirmed a "buy" rating and set a $1,125.00 price target on shares of Costco Wholesale in a research report on Friday, May 29th. Wells Fargo & Company upped their price objective on shares of Costco Wholesale from $950.00 to $1,000.00 and gave the stock an "equal weight" rating in a research report on Thursday, April 9th. HC Wainwright reaffirmed a "buy" rating on shares of Costco Wholesale in a research note on Monday, June 1st. Deutsche Bank Aktiengesellschaft upped their price objective on shares of 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. Finally, Weiss Ratings downgraded Costco Wholesale from a "buy (b)" rating to a "buy (b-)" rating in a research note on Tuesday, June 23rd. Twenty-two analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $1,061.10.

Insiders Place Their Bets

In other news, Director Kenneth D. Denman sold 885 shares of Costco Wholesale stock in a transaction dated 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 approximately $4,575,653.55. This trade represents a 15.62% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. 0.10% of the stock is currently owned by insiders.

More Costco Wholesale News

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

• Positive Sentiment: Costco reported strong June results, with net sales up 10.6% year over year and comparable sales rising 8.8%; digitally enabled comparable sales jumped 20.9%, showing that demand and online momentum remain solid. Article Title
• Positive Sentiment: Analysts and recent commentary continue to highlight Costco’s resilient traffic, defensive business model, and strong membership-driven economics, with several firms keeping Buy ratings and upbeat price targets. Article Title
• Neutral Sentiment: Costco also declared a quarterly dividend, reinforcing its shareholder-return profile, but the payout was not a major catalyst for the stock. Article Title
• Neutral Sentiment: Costco expanded its digital wallet checkout feature, which could improve convenience and member experience over time, though the immediate market impact is likely limited. Article Title
• Negative Sentiment: Shares are falling as investors look past the strong sales headline and focus on slower June growth versus earlier months, uneven regional performance, and the fact that gas and foreign exchange helped boost results. Article Title
• Negative Sentiment: Valuation concerns are also weighing on sentiment, with commentary noting the stock may have become expensive after a strong run; JPMorgan trimmed its price target to $1,100, adding to profit-taking pressure. Article Title
• Negative Sentiment: A proposed class-action lawsuit over protein powder allegedly containing heavy metals could create headline risk and add some near-term overhang for the stock. Article Title

Institutional Trading of Costco Wholesale

A number of large investors have recently bought and sold shares of COST. World Equity Group Inc. boosted its holdings in Costco Wholesale by 5.9% in the 2nd quarter. World Equity Group Inc. now owns 1,011 shares of the retailer's stock valued at $946,000 after purchasing an additional 56 shares in the last quarter. Focus Financial Network Inc. grew its stake in Costco Wholesale by 3.6% in the 2nd quarter. Focus Financial Network Inc. now owns 10,630 shares of the retailer's stock valued at $9,944,000 after acquiring an additional 367 shares during the last quarter. Allied Private Wealth LLC purchased a new position in shares of Costco Wholesale during the 2nd quarter worth approximately $783,000. Great Waters Wealth Management raised its holdings in shares of Costco Wholesale by 6.0% in the second quarter. Great Waters Wealth Management now owns 1,812 shares of the retailer's stock worth $1,695,000 after acquiring an additional 102 shares during the last quarter. Finally, Arista Wealth Management LLC lifted its holdings in Costco Wholesale by 0.7% in the 2nd quarter. Arista Wealth Management LLC now owns 7,505 shares of the retailer's stock valued at $7,021,000 after purchasing an additional 54 shares in the last quarter. Institutional investors and hedge funds own 68.48% of the company's stock.

Costco Wholesale Stock Down 4.2%

The firm has a market cap of $404.88 billion, a PE ratio of 45.92, a P/E/G ratio of 4.59 and a beta of 0.88. The firm's 50 day moving average is $986.93 and its 200-day moving average is $975.26. The company has a quick ratio of 0.61, a current ratio of 1.07 and a debt-to-equity ratio of 0.17.

Costco Wholesale (NASDAQ:COST - Get Free Report) last announced its quarterly earnings data on Thursday, May 28th. The retailer reported $4.93 earnings per share for the quarter, missing the consensus estimate of $4.94 by ($0.01). The company had revenue of $70.53 billion for the quarter, compared to analysts' expectations of $70.12 billion. Costco Wholesale had a return on equity of 28.04% and a net margin of 3.01%.During the same quarter in the previous year, the company earned $4.28 earnings per share. As a group, equities research analysts expect that Costco Wholesale Corporation will post 20.38 earnings per share for the current fiscal year.

Costco Wholesale Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, August 7th. Shareholders of record on Friday, July 24th will be paid a dividend of $1.47 per share. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. The ex-dividend date is Friday, July 24th. 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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