Costco Wholesale (NASDAQ:COST) Reaches New 1-Year High on Analyst Upgrade

Key Points

• Costco shares reached a new 52-week high, trading near $1,099, after Sanford C. Bernstein raised its price target to $1,155 and maintained an Outperform rating.
• Analyst sentiment is generally positive: the stock carries a Moderate Buy consensus and an average target of $1,092.23, though some analysts have issued Hold ratings or raised valuation concerns.
• Costco beat quarterly earnings and revenue estimates, with revenue up 11.1% year over year; it also announced a $30-per-share special dividend, payable December 4 to shareholders of record November 24.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report)'s share price hit a new 52-week high during mid-day trading on Thursday after Sanford C. Bernstein raised their price target on the stock from $1,143.00 to $1,155.00. Sanford C. Bernstein currently has an outperform rating on the stock. Costco Wholesale traded as high as $1,097.09 and last traded at $1,099.3870, with a volume of 36,524 shares traded. The stock had previously closed at $1,087.61.

Several other equities analysts also recently issued reports on the stock. HSBC upgraded shares of Costco Wholesale to a "buy" rating in a report on Friday, September 25th. Truist Financial lowered their target price on shares of Costco Wholesale from $1,011.00 to $955.00 and set a "hold" rating for the company in a research note on Friday, September 25th. Tigress Financial boosted their target price on shares of Costco Wholesale from $1,065.00 to $1,250.00 and gave the stock a "buy" rating in a research report on Thursday, October 15th. Royal Bank Of Canada restated a "sector perform" rating and set a $1,000.00 price target on shares of Costco Wholesale in a research note on Friday, October 9th. Finally, BMO Capital Markets restated an "outperform" rating on shares of Costco Wholesale in a research note on Friday, September 25th. One investment analyst has rated the stock with a Strong Buy rating, twenty-three have given a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $1,092.23.

Insider Activity 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 stock was sold at an average price of $915.93, for a total transaction of $2,015,046.00. Following the transaction, the executive vice president owned 7,134 shares of the company's stock, valued at $6,534,244.62. This represents a 23.57% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, EVP William Richard Wilcox sold 1,100 shares of the company's stock in a transaction on Tuesday, October 13th. The stock was sold at an average price of $958.21, for a total transaction of $1,054,031.00. Following the transaction, the executive vice president directly owned 3,094 shares in the company, valued at approximately $2,964,701.74. This trade represents a 26.23% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 0.10% of the stock is owned by insiders.

Trending Headlines about Costco Wholesale

Investors following COST have been watching these headlines:

• Positive Sentiment: Bernstein raised its price target to $1,155 from $1,143 and maintained an Outperform rating. Separately, a report said 38 ETFs purchased Costco shares on Nov. 10, with total reported ETF buying of $88.9 million. Analyst and market commentary ETF trading report
• Positive Sentiment: Costco was included among retailers viewed as having strong potential to beat earnings, with value pricing, digital expansion and resilient demand cited as supportive factors. This is an outlook, not a reported Costco earnings result. Retail earnings outlook
• Negative Sentiment: Freedom Broker cut its rating from Buy to Hold, citing valuation concerns, and set a $1,050 target. The downgrade underscores the risk that Costco’s premium share price may limit upside even with strong business performance. Freedom Broker downgrade

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. State Street Corp raised its holdings in shares of Costco Wholesale by 1.0% in the third quarter. State Street Corp now owns 18,565,777 shares of the retailer's stock worth $16,901,169,000 after acquiring an additional 180,826 shares during the last quarter. Fort Sheridan Advisors LLC boosted its stake in shares of Costco Wholesale by 10.7% during the third quarter. Fort Sheridan Advisors LLC now owns 2,840 shares of the retailer's stock valued at $2,585,000 after acquiring an additional 275 shares during the last quarter. E Fund Management Hong Kong Co. Ltd. increased its position in Costco Wholesale by 43.6% during the 3rd quarter. E Fund Management Hong Kong Co. Ltd. now owns 3,896 shares of the retailer's stock worth $3,547,000 after purchasing an additional 1,182 shares in the last quarter. Sumitomo Life Insurance Co. increased its position in Costco Wholesale by 0.7% during the 3rd quarter. Sumitomo Life Insurance Co. now owns 4,365 shares of the retailer's stock worth $3,974,000 after purchasing an additional 31 shares in the last quarter. Finally, TIAA CREF Individual & Institutional Services LLC raised its stake in Costco Wholesale by 3.4% in the 3rd quarter. TIAA CREF Individual & Institutional Services LLC now owns 18,677 shares of the retailer's stock valued at $17,002,000 after purchasing an additional 612 shares during the last quarter. Hedge funds and other institutional investors own 68.48% of the company's stock.

Costco Wholesale Stock Up 0.6%

The firm's 50 day moving average is $960.23 and its two-hundred day moving average is $973.88. The stock has a market cap of $484.71 billion, a price-to-earnings ratio of 52.88, a P/E/G ratio of 4.71 and a beta of 0.85. The company has a current ratio of 1.06, a quick ratio of 0.62 and a debt-to-equity ratio of 0.11.

Costco Wholesale (NASDAQ:COST - Get Free Report) last released its quarterly 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 company 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 firm's revenue for the quarter was up 11.1% compared to the same quarter last year. During the same period last year, the company earned $5.87 EPS. On average, sell-side analysts predict that Costco Wholesale Corporation will post 22.70 EPS for the current year.

Costco Wholesale Dividend Announcement

The company also recently disclosed a special dividend, which will be paid on Friday, December 4th. Investors of record on Tuesday, November 24th will be paid a dividend of $30.00 per share. The ex-dividend date of this dividend is Tuesday, November 24th. Costco Wholesale's dividend payout ratio is presently 28.32%.

About Costco Wholesale

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally low prices. Its products include groceries, fresh foods, appliances, electronics, apparel, furniture, and household goods, as well as its Kirkland Signature private-label line. The company also provides services such as gasoline stations, pharmacies, optical and hearing-aid centers, food courts, and travel offerings. Costco serves members through warehouses and online channels.

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