Costco Wholesale (NASDAQ:COST) Stock Falls 1.5% - Should You Sell?

Key Points

• Costco shares fell 1.5% to about $1,003 in mid-day trading, though the stock remains above its 50-day and 200-day moving averages.
• Analyst sentiment remains favorable, with a consensus “Moderate Buy” rating and average price target of $1,086.19. Costco also exceeded quarterly EPS and revenue estimates, with revenue rising 11.1% year over year.
• Investors should weigh Costco’s strong membership-based business and growth prospects against its rich valuation of roughly 48 times earnings, potential grocery-price competition from Kroger, and recent insider selling.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shares fell 1.5% on Friday. The stock traded as low as $1,002.68 and last traded at $1,003.32. 2,106,119 shares were traded during mid-day trading, a decline of 4% from the average daily volume of 2,187,460 shares. The stock had previously closed at $1,018.21.

More Costco Wholesale News

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

• Positive Sentiment: Costco is expanding its beauty offering through a new Beauty Table program, which will feature REJURAN® COSMETICS skincare products and could increase customer traffic, product variety and high-margin sales. REJURAN Cosmetics Expands U.S. Retail Presence Through Costco’s Beauty Table Program
• Positive Sentiment: Analyst sentiment remains supportive. CICC initiated coverage with an Outperform rating, while Tigress Financial raised its price target to $1,250. Costco’s average brokerage recommendation is equivalent to a Buy. CICC Initiates Coverage With Outperform Rating Tigress Financial Raises Costco Price Target
• Positive Sentiment: Erste Group modestly increased its fiscal 2028 EPS estimate to $25.07 from $25.01, reinforcing expectations for continued earnings growth. Separate commentary highlights Costco’s membership model and strong decade-long shareholder returns as long-term advantages. Erste Group Raises Costco EPS Estimate Costco’s Long-Term Shareholder Returns
• Neutral Sentiment: Discussion of a potential stock split could support retail-investor interest, but Costco’s CEO only indicated that the issue is regularly discussed; no split has been announced. Could Costco Announce Another Stock Split?
• Negative Sentiment: Kroger plans to spend $5 billion on lower prices after acknowledging market-share losses to Walmart and Costco. A more aggressive grocery-price environment could pressure Costco’s margins or require greater promotional spending. Kroger Plans Price Cuts to Compete With Costco and Walmart
• Negative Sentiment: At roughly 48 times earnings, COST remains richly valued. Broader volatility, elevated interest rates and profit-taking can pressure a premium-priced stock even when its operating outlook remains favorable.

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on the company. BMO Capital Markets reaffirmed an "outperform" rating on shares of Costco Wholesale in a research note on Friday, September 25th. Oppenheimer restated an "outperform" rating and set a $1,160.00 price objective on shares of Costco Wholesale in a report on Wednesday, September 16th. DA Davidson upped their price objective on Costco Wholesale from $1,000.00 to $1,040.00 and gave the company a "neutral" rating in a research report on Friday, September 25th. JPMorgan Chase & Co. reduced their target price on Costco Wholesale from $1,100.00 to $1,015.00 and set an "overweight" rating on the stock in a research note on Friday, September 25th. Finally, Deutsche Bank Aktiengesellschaft decreased their target price on Costco Wholesale from $1,091.00 to $1,079.00 and set a "buy" rating for the company in a research report on Monday, September 28th. Twenty-five analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $1,086.19.

Costco Wholesale Stock Performance

The business has a 50 day simple moving average of $937.12 and a 200 day simple moving average of $962.93. The company has a quick ratio of 0.62, a current ratio of 1.06 and a debt-to-equity ratio of 0.11. The company has a market capitalization of $444.60 billion, a PE ratio of 48.33, a PEG ratio of 4.27 and a beta of 0.88.

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

Costco Wholesale Announces Dividend

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

Insider Buying and Selling

In other news, EVP William Richard Wilcox sold 1,100 shares of the company's stock in a transaction that occurred on Tuesday, October 13th. The stock was sold at an average price of $958.21, for a total value of $1,054,031.00. Following the completion of the sale, the executive vice president directly owned 3,094 shares in the company, valued at $2,964,701.74. This represents a 26.23% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP Claudine Adamo sold 2,200 shares of the firm's stock in a transaction on Tuesday, September 29th. The stock was sold at an average price of $915.93, for a total value 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 $6,534,244.62. This trade represents a 23.57% 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 owned by corporate insiders.

Institutional Investors Weigh In On Costco Wholesale

Hedge funds and other institutional investors have recently bought and sold shares of the company. Contravisory Investment Management Inc. grew its position in Costco Wholesale by 107.7% in the third quarter. Contravisory Investment Management Inc. now owns 27 shares of the retailer's stock worth $25,000 after acquiring an additional 14 shares during the period. C M Bidwell & Associates Ltd. purchased a new stake in Costco Wholesale in the 2nd quarter valued at about $28,000. Burk Holdings LLC purchased a new stake in shares of Costco Wholesale in the 2nd quarter valued at approximately $30,000. Manning & Napier Advisors LLC acquired a new position in shares of Costco Wholesale in the 2nd quarter worth approximately $30,000. Finally, Bullseye Investment Management LLC acquired a new position in shares of Costco Wholesale in the 2nd quarter worth approximately $35,000. 68.48% of the stock is currently owned by institutional investors and hedge funds.

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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