Costco Wholesale (NASDAQ:COST) Stock Jumps 2% – Should You Buy?

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

Key Headlines Impacting Costco Wholesale

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

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on COST shares. CICC Research began coverage on Costco Wholesale in a research report on Wednesday. They issued an “outperform” rating and a $1,050.00 price target for the company. Wells Fargo & Company cut their target price on Costco Wholesale from $1,000.00 to $950.00 and set an “equal weight” rating for the company in a research note on Friday, September 25th. BTIG Research restated a “buy” rating and issued a $1,125.00 target price on shares of Costco Wholesale in a research note on Wednesday, September 23rd. Truist Financial decreased their target price on Costco Wholesale from $1,011.00 to $955.00 and set a “hold” rating on the stock in a research note on Friday, September 25th. Finally, Freedom Broker lowered their price target on shares of Costco Wholesale from $1,030.00 to $1,010.00 and set a “buy” rating for the company in a research note on Friday, September 25th. Twenty-five research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, Costco Wholesale has an average rating of “Moderate Buy” and an average target price of $1,086.19.

Costco Wholesale Price Performance

The company has a market cap of $451.20 billion, a P/E ratio of 49.05, a PEG ratio of 4.25 and a beta of 0.88. The firm’s 50-day moving average is $937.12 and its two-hundred day moving average is $962.93. The company has a debt-to-equity ratio of 0.11, a current ratio of 1.06 and a quick ratio of 0.62.

Costco Wholesale (NASDAQ:COST) last released its earnings results on Thursday, September 24th. The retailer reported $6.75 earnings per share for the quarter, topping analysts’ consensus estimates of $6.54 by $0.21. The business had revenue of $95.72 billion for 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 business’s revenue was up 11.1% compared to the same quarter last year. During the same quarter last year, the firm posted $5.87 earnings per share. Analysts anticipate that Costco Wholesale Corporation will post 22.70 earnings per share for the current year.

Costco Wholesale Announces Dividend

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

Insider Transactions at Costco Wholesale

In related news, EVP William Richard Wilcox sold 1,100 shares of the company’s stock in a transaction that occurred 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 sale, the executive vice president directly owned 3,094 shares of the company’s stock, valued at $2,964,701.74. This represents a 26.23% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, EVP Claudine Adamo sold 2,200 shares of Costco Wholesale 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 sale, the executive vice president directly owned 7,134 shares of the company’s stock, valued at approximately $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

Several large investors have recently modified their holdings of the stock. Sarasin & Partners LLP boosted its stake in shares of Costco Wholesale by 6.9% during the 2nd quarter. Sarasin & Partners LLP now owns 214,194 shares of the retailer’s stock worth $200,372,000 after buying an additional 13,795 shares during the last quarter. Nissay Asset Management Corp Japan lifted its holdings in shares of Costco Wholesale by 4.1% during the second quarter. Nissay Asset Management Corp Japan now owns 158,416 shares of the retailer’s stock worth $148,193,000 after buying an additional 6,200 shares in the last quarter. Silvant Capital Management LLC acquired a new stake in Costco Wholesale during the second quarter worth approximately $16,013,000. Hyperion Asset Management Ltd lifted its holdings in shares of Costco Wholesale by 9.0% during the 2nd quarter. Hyperion Asset Management Ltd now owns 68,762 shares of the retailer’s stock worth $64,325,000 after acquiring an additional 5,656 shares during the period. Finally, Concurrent Investment Advisors LLC boosted its stake in Costco Wholesale by 15.0% in the second quarter. Concurrent Investment Advisors LLC now owns 22,766 shares of the retailer’s stock valued at $21,297,000 after buying an additional 2,974 shares in the last quarter. Hedge funds and other institutional investors own 68.48% of the company’s stock.

Costco Wholesale Company Profile

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.