Costco Wholesale (NASDAQ:COST) Shares Climb 2% - Here's What Happened

Key Points

• Costco shares rose 2% to about $1,018 amid bullish analyst coverage, including Tigress Financial’s price-target increase to $1,250. The consensus rating is “Moderate Buy,” with an average target of $1,086.19.
• Costco exceeded quarterly expectations, reporting $6.75 in EPS and $95.72 billion in revenue, with revenue up 11.1% year over year. The company also declared a quarterly dividend of $1.47 per share.
• Valuation and competition remain key risks: Costco trades at a premium earnings multiple, while Kroger plans to invest $5 billion in lower prices and technology to compete more aggressively with Costco and Walmart.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shares traded up 2% on Thursday. The company traded as high as $1,018.86 and last traded at $1,018.21. 2,597,562 shares were traded during mid-day trading, an increase of 19% from the average session volume of 2,191,760 shares. The stock had previously closed at $998.31.

Costco Wholesale News Roundup

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

• Positive Sentiment: Analyst optimism: Tigress Financial raised its price target to $1,250, while CICC initiated coverage with an “outperform” rating. These actions reinforce the bullish view that Costco’s membership income, sales growth and customer loyalty can support further gains. Tigress Financial raises target for Costco Wholesale stock
• Positive Sentiment: Long-term performance and growth potential: A retrospective analysis said $1,000 invested in Costco 10 years ago would have grown to $8,018, substantially outperforming the S&P 500. Another report highlighted potential upside surprises, including continued membership growth and resilient consumer demand. Costco Turned $1,000 Into $8,018
• Positive Sentiment: Potential stock split: Costco’s CEO said a stock split is regularly discussed by the board. No split was announced, but speculation could improve accessibility for employees and smaller investors following the stock’s strong appreciation. Costco's Last Stock Split Was in 2000
• Neutral Sentiment: Valuation remains a concern: Costco trades at the highest earnings multiple among several major retailers, despite having a relatively low operating margin. Its premium valuation leaves less room for disappointment if growth or membership trends slow. Are You Overpaying For Costco Stock Versus Its Rivals?
• Negative Sentiment: Competitive pressure is increasing: Kroger plans to spend $5 billion on lower prices and technology after acknowledging market-share losses to Walmart and Costco. More aggressive grocery pricing could pressure Costco’s traffic, margins or competitive advantage. Kroger Is Spending $5 Billion to Cut Prices

Analysts Set New Price Targets

Several equities research analysts have recently weighed in on COST shares. TD Cowen reissued a "buy" rating on shares of Costco Wholesale in a research note on Friday, September 25th. Mizuho lowered their price target on Costco Wholesale from $1,100.00 to $1,065.00 and set an "outperform" rating on the stock in a report on Friday, September 25th. Oppenheimer reiterated an "outperform" rating and set a $1,160.00 price target on shares of Costco Wholesale in a research note on Wednesday, September 16th. Tigress Financial upped their price objective on shares of Costco Wholesale from $1,065.00 to $1,250.00 and gave the stock a "buy" rating in a research note on Thursday, October 15th. Finally, Wells Fargo & Company reduced their price objective on Costco Wholesale from $1,000.00 to $950.00 and set an "equal weight" rating on the stock in a report on Friday, September 25th. Twenty-five research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $1,086.19.

Costco Wholesale Stock Up 2.0%

The firm has a fifty day simple moving average of $937.12 and a 200-day simple moving average of $962.93. The firm has a market cap of $451.20 billion, a price-to-earnings ratio of 49.05, a P/E/G ratio of 4.25 and a beta of 0.88. The company has a debt-to-equity ratio of 0.11, a quick ratio of 0.62 and a current ratio of 1.06.

Costco Wholesale (NASDAQ:COST - Get Free Report) last posted its quarterly earnings data on Thursday, September 24th. The retailer reported $6.75 EPS for the quarter, topping analysts' consensus estimates of $6.54 by $0.21. Costco Wholesale had a return on equity of 27.60% and a net margin of 3.04%. The firm had revenue of $95.72 billion for the quarter, compared to analyst estimates of $94.97 billion. During the same quarter last year, the company earned $5.87 EPS. The company's revenue was up 11.1% on a year-over-year basis. As a group, sell-side analysts expect that Costco Wholesale Corporation will post 22.70 EPS for the current year.

Costco Wholesale Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, November 13th. Stockholders of record on Friday, October 30th will be paid a $1.47 dividend. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. The ex-dividend date is Friday, October 30th. Costco Wholesale's dividend payout ratio (DPR) is presently 28.32%.

Insider Buying and Selling at Costco Wholesale

In other Costco Wholesale 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 sale, the executive vice president owned 7,134 shares of the company's stock, valued at approximately $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 can be accessed through this hyperlink. Also, EVP William Richard Wilcox sold 1,100 shares of Costco Wholesale stock in a transaction on Tuesday, October 13th. The shares were sold at an average price of $958.21, for a total transaction of $1,054,031.00. Following the completion of the sale, the executive vice president directly owned 3,094 shares of the company's stock, valued at approximately $2,964,701.74. This trade represents a 26.23% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.10% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Costco Wholesale

A number of hedge funds have recently added to or reduced their stakes in the stock. Wealth Effects LLC raised its position in Costco Wholesale by 1.2% in the 1st quarter. Wealth Effects LLC now owns 874 shares of the retailer's stock valued at $871,000 after buying an additional 10 shares during the last quarter. Folger Nolan Fleming Douglas Capital Management Inc. grew its stake in shares of Costco Wholesale by 1.8% in the 1st quarter. Folger Nolan Fleming Douglas Capital Management Inc. now owns 551 shares of the retailer's stock worth $549,000 after acquiring an additional 10 shares in the last quarter. First National Bank of Hutchinson grew its stake in shares of Costco Wholesale by 0.9% in the 1st quarter. First National Bank of Hutchinson now owns 1,098 shares of the retailer's stock worth $1,094,000 after acquiring an additional 10 shares in the last quarter. Frisch Financial Group Inc. raised its holdings in shares of Costco Wholesale by 1.0% in the first quarter. Frisch Financial Group Inc. now owns 1,049 shares of the retailer's stock valued at $1,045,000 after purchasing an additional 10 shares during the last quarter. Finally, Main Street Group LTD raised its holdings in shares of Costco Wholesale by 0.8% in the first quarter. Main Street Group LTD now owns 1,226 shares of the retailer's stock valued at $1,221,000 after purchasing an additional 10 shares during the last quarter. Institutional investors and hedge funds own 68.48% of the company's stock.

About Costco Wholesale

Costco Wholesale Corporation operates a membership-based warehouse retail business under the Costco name. The company sells merchandise in bulk and at competitive prices through warehouse clubs and e-commerce platforms, serving individual consumers, businesses and other organizations.

Its product selection includes groceries and fresh foods, household supplies, appliances, electronics, furniture, apparel, health and beauty products, jewelry, automotive products and prescription drugs. Costco also provides services such as optical care, pharmacy services, hearing-aid sales, travel offerings and fuel sales, depending on location.

The company traces its roots to Price Club, which opened in San Diego in 1976.

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