TD Cowen Reiterates Buy Rating for Costco Wholesale (NASDAQ:COST)

Key Points

• TD Cowen reiterated a Buy rating on Costco Wholesale and kept a $1,175 price target, implying about 21.66% upside from the previous close.
• Other analysts remain broadly positive: Goldman Sachs, BMO Capital Markets, and Oppenheimer all raised price targets, while the overall consensus on Costco is still a Moderate Buy with an average target of $1,060.41.
• Costco’s latest quarter was mixed but solid overall, with revenue beating expectations at $70.53 billion even as EPS missed by $0.01. The stock was trading at $965.80 after a gain on the day, but valuation concerns continue to weigh on sentiment.

Costco Wholesale (NASDAQ:COST - Get Free Report)'s stock had its "buy" rating reiterated by equities researchers at TD Cowen in a research note issued to investors on Wednesday,Benzinga reports. They presently have a $1,175.00 target price on the retailer's stock. TD Cowen's target price indicates a potential upside of 21.66% from the company's previous close.

COST has been the subject of a number of other reports. The Goldman Sachs Group boosted their price target on Costco Wholesale from $1,088.00 to $1,159.00 and gave the stock a "buy" rating in a research note on Friday, May 29th. Daiwa Securities Group raised their price objective on Costco Wholesale from $917.00 to $975.00 and gave the company a "neutral" rating in a research note on Tuesday, March 10th. BMO Capital Markets lifted their price objective on Costco Wholesale from $1,175.00 to $1,315.00 and gave the stock an "outperform" rating in a report on Friday, March 6th. Guggenheim reiterated a "neutral" rating on shares of Costco Wholesale in a research report on Monday. Finally, Oppenheimer lifted their price target on Costco Wholesale from $1,100.00 to $1,160.00 and gave the stock an "outperform" rating in a research note on Tuesday, May 19th. Twenty-two research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Costco Wholesale presently has a consensus rating of "Moderate Buy" and an average price target of $1,060.41.

Costco Wholesale Price Performance

Shares of NASDAQ:COST traded up $11.53 on Wednesday, reaching $965.80. 419,286 shares of the company were exchanged, compared to its average volume of 2,152,833. The company has a 50-day moving average of $1,007.23 and a 200-day moving average of $963.04. The company has a current ratio of 1.06, a quick ratio of 0.59 and a debt-to-equity ratio of 0.18. The firm has a market cap of $428.48 billion, a price-to-earnings ratio of 48.58, a price-to-earnings-growth ratio of 4.59 and a beta of 0.88. Costco Wholesale has a 1-year low of $844.06 and a 1-year high of $1,096.50.

Costco Wholesale (NASDAQ:COST - Get Free Report) last released its quarterly earnings data on Thursday, May 28th. The retailer reported $4.93 EPS for the quarter, missing analysts' consensus estimates of $4.94 by ($0.01). Costco Wholesale had a return on equity of 28.72% and a net margin of 3.01%.The company had revenue of $70.53 billion for the quarter, compared to analysts' expectations of $70.12 billion. During the same period in the prior year, the firm posted $4.28 EPS. Equities analysts forecast that Costco Wholesale will post 20.36 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Costco Wholesale news, EVP Claudine Adamo sold 730 shares of Costco Wholesale stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $1,003.02, for a total value of $732,204.60. Following the completion of the sale, the executive vice president directly owned 6,121 shares of the company's stock, valued at approximately $6,139,485.42. The trade was a 10.66% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 0.10% of the company's stock.

Institutional Investors Weigh In On Costco Wholesale

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Gunpowder Capital Management LLC dba Oliver Wealth Management purchased a new position in shares of Costco Wholesale during the 4th quarter worth about $27,000. Mcguire Capital Advisors Inc. acquired a new position in Costco Wholesale during the fourth quarter worth approximately $28,000. Hurley Capital LLC raised its stake in Costco Wholesale by 120.0% during the third quarter. Hurley Capital LLC now owns 33 shares of the retailer's stock worth $31,000 after purchasing an additional 18 shares during the period. Lifetime Wealth Management P.C. acquired a new position in shares of Costco Wholesale in the 4th quarter valued at $28,000. Finally, Manning & Napier Advisors LLC grew its stake in shares of Costco Wholesale by 750.0% during the 1st quarter. Manning & Napier Advisors LLC now owns 34 shares of the retailer's stock valued at $34,000 after buying an additional 30 shares during the period. Hedge funds and other institutional investors own 68.48% of the company's stock.

Costco Wholesale News Roundup

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

• Positive Sentiment: Costco reported another strong quarter, with double-digit revenue growth, solid comparable sales, higher traffic, bigger basket sizes, and continued strength in memberships and digital operations. Jefferies said the company’s value-focused model and membership growth continue to support the outlook. Article Title
• Positive Sentiment: Costco’s gas business is drawing more traffic, with reports of record-breaking fuel sales as higher gasoline prices push shoppers to its cheaper pumps. That supports store visits and overall sales momentum. Article Title
• Positive Sentiment: Analyst commentary remains constructive overall, with brokerages maintaining a “Moderate Buy” consensus and DA Davidson calling Costco a “best-of-breed” operator, underscoring confidence in its long-term fundamentals. Article Title
• Neutral Sentiment: Several articles noted that Costco continues to outperform over the long term, including a piece highlighting how much a $10,000 investment would have grown over 10 years. That is supportive of the investment case, but it is not a near-term catalyst. Article Title
• Negative Sentiment: Despite the strong quarter, investors are worried Costco’s valuation is still too rich, with several reports saying the stock leaves little room for error after its post-earnings slump. Article Title
• Negative Sentiment: Coverage also pointed to the shares falling after earnings and said the recent pullback reflects concern that even strong sales growth may not be enough to justify the premium multiple right now. Article Title

About Costco Wholesale

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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