Costco Wholesale Corporation $COST Position Increased by Sound Income Strategies LLC

Key Points

• Institutional buying increased: Sound Income Strategies raised its Costco holdings by 94.4% in the third quarter to 3,488 shares valued at approximately $3.18 million. Institutional investors collectively own 68.48% of the company.
• Sales and earnings exceeded expectations: September net sales rose 13% year over year to about $30.02 billion, while the latest quarterly EPS of $6.75 surpassed the $6.54 consensus estimate and revenue reached $95.72 billion.
• Strong growth faces valuation concerns: Costco has a consensus “Moderate Buy” rating and an average price target of $1,046.27, but analysts caution that its elevated valuation and potentially lower-margin contributions from gasoline and foreign exchange may limit earnings upside.

Sound Income Strategies LLC grew its holdings in Costco Wholesale Corporation (NASDAQ:COST - Free Report) by 94.4% in the third quarter, according to its most recent disclosure with the SEC. The fund owned 3,488 shares of the retailer's stock after buying an additional 1,694 shares during the period. Sound Income Strategies LLC's holdings in Costco Wholesale were worth $3,175,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also made changes to their positions in the business. Gunpowder Capital Management LLC dba Oliver Wealth Management purchased a new stake in Costco Wholesale during the fourth quarter worth about $27,000. Lifetime Wealth Management P.C. purchased a new position in Costco Wholesale in the fourth quarter valued at about $28,000. C M Bidwell & Associates Ltd. acquired a new stake in shares of Costco Wholesale during the 2nd quarter valued at approximately $28,000. Burk Holdings LLC acquired a new stake in shares of Costco Wholesale during the 2nd quarter valued at approximately $30,000. Finally, Manning & Napier Advisors LLC purchased a new stake in shares of Costco Wholesale during the 2nd quarter worth approximately $30,000. 68.48% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Costco Wholesale

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

• Positive Sentiment: Strong September sales momentum: Costco reported approximately $30.02 billion in September net sales, up 13% year over year. Total comparable sales increased 11.4%, U.S. comparable sales rose 12.5%, and digitally enabled sales climbed 19%, supported by stronger traffic and transaction growth. Costco's September Sales Rise 13% on Strong Comps, Digital Growth
• Positive Sentiment: Analysts see improving trends: UBS characterized the September results as evidence of accelerating trends, while Royal Bank of Canada maintained a Sector Perform rating and a $1,000 price target, implying additional upside from recently reported levels. Costco September Sales Point to Accelerating Trends, UBS Says
• Neutral Sentiment: Short-interest data is inconclusive: A report lists October short interest at zero shares and a zero-day days-to-cover ratio. That figure appears inconsistent with normal market data and is unlikely to be a meaningful trading signal without confirmation.
• Neutral Sentiment: Analyst support remains mixed: DA Davidson reiterated a Hold rating following a warehouse-club tour, indicating that strong operating trends have not yet led all analysts to recommend buying the stock. Costco Stock: Here's What DA Davidson Found During Its Warehouse Club Tour
• Negative Sentiment: Valuation and margin risks temper the sales beat: RBC noted that Costco’s growth may already be reflected in its share price. Analysts also cautioned that gasoline, foreign exchange, and other one-time or lower-margin factors contributed to the September improvement, potentially limiting the impact on earnings and margins. Costco's Sales Rebound in September Looks Great on Paper

Costco Wholesale Stock Down 0.1%

Shares of NASDAQ:COST opened at $946.92 on Friday. The company has a current ratio of 1.06, a quick ratio of 0.62 and a debt-to-equity ratio of 0.11. The firm has a market cap of $419.94 billion, a price-to-earnings ratio of 45.61, a PEG ratio of 4.05 and a beta of 0.88. The stock's 50-day moving average price is $930.71 and its two-hundred day moving average price is $963.38. Costco Wholesale Corporation has a 12-month low of $844.06 and a 12-month high of $1,096.50.

Costco Wholesale (NASDAQ:COST - Get Free Report) last released its earnings results on Thursday, September 24th. The retailer reported $6.75 earnings per share (EPS) for the quarter, topping the consensus estimate of $6.54 by $0.21. The business had revenue of $95.72 billion for the quarter, compared to analysts' expectations of $94.97 billion. Costco Wholesale had a net margin of 3.04% and a return on equity of 27.60%. The company's quarterly revenue was up 11.1% on a year-over-year basis. During the same period last year, the company earned $5.87 earnings per share. On average, research analysts forecast that Costco Wholesale Corporation will post 22.86 EPS for the current year.

Analysts Set New Price Targets

COST has been the topic of a number of research analyst reports. Wells Fargo & Company decreased their target price on Costco Wholesale from $1,000.00 to $950.00 and set an "equal weight" rating on the stock in a research report on Friday, September 25th. BTIG Research restated a "buy" rating and issued a $1,125.00 price target on shares of Costco Wholesale in a research report on Wednesday, September 23rd. Jefferies Financial Group decreased their price objective on shares of Costco Wholesale from $1,130.00 to $1,100.00 in a research report on Friday, September 25th. Freedom Broker lowered their price objective on shares of Costco Wholesale from $1,030.00 to $1,010.00 and set a "buy" rating on the stock in a research note on Friday, September 25th. Finally, Citigroup initiated coverage on shares of Costco Wholesale in a report on Thursday, June 18th. They set a "neutral" rating and a $1,020.00 target price for the company. Twenty-three equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average target price of $1,046.27.

Insider Transactions at Costco Wholesale

In related news, EVP Claudine Adamo sold 2,200 shares of the company's stock in a transaction on Tuesday, September 29th. The shares were sold at an average price of $915.93, for a total transaction of $2,015,046.00. Following the completion of the sale, the executive vice president directly owned 7,134 shares of the company's stock, valued at approximately $6,534,244.62. This represents a 23.57% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. 0.10% of the stock is currently owned by corporate insiders.

Costco Wholesale Company Profile

Costco Wholesale Corporation operates a membership-based warehouse retail business under the Costco name. The company sells a broad selection of merchandise, including groceries, fresh foods, beverages, appliances, electronics, furniture, apparel, jewelry, hardware, and seasonal products. It also offers services such as gasoline, pharmacies, optical departments, hearing-aid centers, food courts, travel services, and business delivery in selected markets.

Costco markets many products under its private-label Kirkland Signature brand and sells merchandise through warehouse locations and e-commerce platforms.

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