Latest news with #COST
CNBC
a day ago
- Business
- CNBC
Analysts stay upbeat on Costco after solid quarter, but say it's richly valued
Costco's solid third-quarter results on Thursday left Wall Street analysts confident that the membership club wholesaler can retain its dominance. The firm, whose sales in its current fiscal year are estimated to reach $275 billion, surpassed analyst estimates on the top and bottom line in the quarter that ended May 11. Analysts pointed to strong foot traffic, customer loyalty and said Costco is well-positioned to handle tariff headwinds as U.S. trade policy continues to evolve. Shares have advanced 14% so far in 2025, outpacing the S & P 500, which is little changed. But after Costco stock more than doubled in the two years from the start of 2023 to the end of 2024, consensus analyst forecasts for the next 12 months imply just 3.4% upside. Bernstein analysts, for example, caution that future gains could be slim because the stock is "priced for perfection." COST YTD mountain Costco stock in 2025. Shares rose 3.1% Friday in reaction to the latest quarter's results released post-market Thursday. Here are the main takeaways from analysts on Wall Street after Costco's fiscal third-quarter print. Bernstein, outperform rating, $1,153 per share price target Analyst Zhihan Ma's forecast implies 11% upside from Friday's close of $1040.18. "Overall, we are encouraged by COST's strong traction with consumers, evidenced by its meaningfully above-peer comp sales growth. Further, we expect COST to continue to expand its store footprint in the U.S. and globally at a measured pace," Ma said. "At the current rate of expansion, we see a long growth runway for COST for decades from here." Morgan Stanley, overweight, $1,225 Analyst Simeon Gutman's price target, which he raised from $1,150, implies about 18% upside. "It is rare to find a business with COST's solid comp/membership growth, while relative e-commerce insulation differentiates its value proposition from other retailers," Gutman said. "We are Overweight even as the stock trades at an elevated valuation given COST's scarcity value, safety, and scale." UBS, buy, $1,205 Analyst Michael Lasser said the third quarter proved that Costco can successfully mitigate potential challenges posed by tariffs, and lauded the company's "superior consistency and execution." "This quarter was a good illustration of why we think COST is well set up to outperform. Once again, COST generated consistent and robust comp performance month in, month out," Lasser said. "It managed its profitability well amid plenty of uncertainties, including [last in, first out] charges and continued labor investments. It also provided compelling evidence why it should be able to mitigate tariffs while maintaining its moat around value." Deutsche Bank, buy, $1,106 Analyst Krisztina Katai's forecast calls for about 6% upside. "All in, we anticipate COST should continue to extend its top-line strength and share gains, and we see meaningful opportunity from its retail media business, the evolution of its business model and supply chain efficiencies to drive further margin expansion," Katai said. Wells Fargo, equal weight, $1,000 Wells Fargo analyst Edward Kelly remains optimistic on Costco over the long-term, but noted some concern due to its valuation. "One of the highest quality companies in consumer with attractive defensive positioning, but risk/reward isn't appealing to us," Kelly said. "A clear share gainer and [membership fee income] a tailwind, but not immune to the weak pricing backdrop, visibility on sustained margin upside is low and the stock looks expensive given the long-term algo."
Yahoo
a day ago
- Business
- Yahoo
Costco Stock Has a Big Price Tag. Some Investors Are Eyeing a Rare Split
Costco's shares finished the week with a price tag over $1,000 apiece, putting them in comparatively rarified company among those of S&P 500 companies. The stock's rise has offered investors a fresh opportunity to wonder whether the company might split its stock—which hasn't happened since 2000. CFO Gary Millerchip in December said that making the shares comparatively cheap is less useful to investors now than in years past because of the availability of fractional shares. Shoppers are fans of Costco's prices. Could the warehouse giant's stock get a smaller price tag, too? That's on some investors' minds lately, with shares of Costco Wholesale (COST) among the most-expensive—on a straightforward price-per-share basis—in the S&P 500: The stock, which closed Friday at around $1,040, was one of a dozen with a four-digit share price. (Topping the list, for those who track such things, was NVR (NVR), shares of which ended the week above $7,000 apiece.) Costco's shares have gotten there in part due to a rise of roughly 25% over the past 12 months, and now there's renewed chatter about whether the company might choose to split the stock. (Stock splits do nothing to the value of a company—broadly, a 10-for-1 split means that instead of one $100 share, you have 10 $10 shares—but they're sometimes taken as a bullish signal.) 'We remain upbeat on the company's ability to gain share going forward and believe shares are positioned for continued outperformance in the current backdrop. Catalysts from here, in our view, include a potential stock split,' Oppenheimer analysts—who have a bullish rating on the shares, along with a $1,130 price target that is above the Wall Street average as tracked by Visible Alpha—wrote late Thursday after Costco reported quarterly financial results. Talk of a Costco split bubbles up from time to time partly because the company rarely does them; it hasn't happened since a two-for-one split in early 2000. Management was asked about splits at the company's January shareholder meeting, with CEO Ron Vachris saying there was 'nothing to report.' The company didn't respond to Investopedia's request for comment in time for publication. CFO Gary Millerchip on a December conference call said that making the shares comparatively cheap is less useful to investors now than in years past because of the availability of fractional shares. 'But we do also recognize that there's a benefit of the stock feeling more affordable for our retail investors and employees who are very important constituents for us," he said. "So we'll continue to evaluate over time.'Read the original article on Investopedia
Globe and Mail
2 days ago
- Business
- Globe and Mail
COST Earnings: Costco's Financial Results Narrowly Beat Wall Street Targets
Grocery retailer Costco Wholesale (COST) has reported quarterly financial results that narrowly topped Wall Street forecasts. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The Seattle-based warehouse club reported earnings per share (EPS) of $4.28, which was ahead of the $4.24 expected among analysts. Revenue in the period totaled $63.21 billion, which was slightly ahead of consensus forecasts of $63.19 billion. The company's sales were up 8% from a year earlier. Costco's net income for the three months ended May 11 rose to $1.90 billion, up from $1.68 billion a year earlier. Total comparable sales were up 5.7% on a year-over-year basis. On an annual basis, sales rose 6.6% in Costco's home market of the U.S., gained 2.9% in Canada, and increased 3.2% in other International markets. Costco Wholesale's net income. Source: Main Street Data Membership Fees Costco said its membership fees came in at $1.24 billion, up 11% from $1.12 billion the previous quarter. Costco raised the price of its annual store membership by $5 in September 2024, the company's first membership price increase since 2017. Costco added that it currently operates 905 warehouse clubs worldwide, including 624 in the U.S. The company ended the quarter with $13.84 billion of cash on hand and cash equivalents. COST stock has gained 10% so far this year. Is COST Stock a Buy? The stock of Costco has a consensus Moderate Buy rating among 24 Wall Street analysts. That rating is based on 17 Buy and seven Hold recommendations assigned in the last three months. The average COST price target of $1,077.00 implies 6.58% upside from current levels. These ratings are likely to change after Costco's financial results. Disclaimer & Disclosure Report an Issue
Globe and Mail
2 days ago
- Business
- Globe and Mail
Buy the Spike in Costco Stock After Earnings?
Exceeding expectations for its fiscal third quarter after-market hours on Thursday, Costco Wholesale COST stock has spiked +4% in today's trading session. The bulk food and general merchandise provider has been able to weather market volatility, with COST now up +14% year to date and sitting on gains of over +120% in the last three years. Still, as one of the largest warehouse operators, Costco stock does carry a hefty price tag of over $1,000 a share, making it a worthy topic to decide whether now is a good time to buy. Costco's Q3 Results Attributed to strategic pricing and bulk discounts, Costco saw a steady uptick in membership fee income and comparable sales. Overall, Costo's Q3 sales increased 8% year over year to $63.2 billion, topping estimates of $63.14 billion. Comparable sales increased 6%, with membership fee revenue rising to $1.24 billion from $1.12 billion in the comparative quarter. On the bottom line, Costco posted Q3 EPS of $4.28, edging estimates of $4.25 and rising 13% from $3.78 per share a year ago. E-Commerce & International Expansion Considering Costo's comparable sales growth, the company's expansion is very intriguing, opening 9 warehouses during Q1. This included a relocation site in Melbourne, Australia, and its 37th warehouse in Japan, along with seven new net locations in the U.S. Costco plans to open 10 warehouses during its fiscal fourth quarter, which will include a second warehouse in Sweden, a 20th warehouse in Korea, and its 110th warehouse in Canada. Taking an Amazon AMZN like approach, Costco also stated it had made progress in building out its digital and e-commerce business with a focus on delivering more personal, relevant experiences by helping members save time and money. Costco's e-commerce sales grew by 15% during Q3 thanks to Costco Logistics, a delivery service for bulk shipments and large retail items, which also includes haul-away services. Costco's Outlook on Tariff Uncertainties Acknowledging the impacts of tariffs and broader economic uncertainties, Costco CEO Ron Vachris stated the company remains confident in the ability of its operators and merchants to rise to the challenges and continue to offer great service while finding consistent value for members. Notably, a third of Costco's sales in the U.S. are imported, with items imported from China accounting for roughly 8%. That said, Costco has made steps to pull forward items it needs for the summer while sourcing additional goods produced locally to reduce tariff impacts and ensure inventory levels. Although Costo doesn't typically provide forward-looking guidance, Zacks projections call for total sales to increase 8% in fiscal 2025, with FY26 sales forecasted to increase another 7% to $294.05 billion. Plus, annual earnings are expected to rise 11% this year and are projected to spike another 10% in FY26 to $19.76 per share. Bottom Line Following its favorable Q3 report, Costco stock sports a Zacks Rank #2 (Buy). Correlating with such, FY25 and FY26 EPS estimates are slightly up over the last 60 days, making Costco's attractive growth trajectory more compelling. Furthermore, the positive trend of earnings estimate revisions could continue in the coming weeks and would certainly suggest more upside for COST. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Globe and Mail
2 days ago
- Business
- Globe and Mail
Why Costco Stock Just Popped
Costco Wholesale (NASDAQ: COST) stock jumped 3% through 10:30 a.m. ET Friday after the company beat analyst forecasts for fiscal third quarter 2025 sales and earnings. Heading into last night's report, analysts forecast Costco would earn $4.23 per share on $63.1 billion in quarterly sales. In fact, Costco earned $4.28 per share, and sales were $63.2 billion. Costco Q3 earnings Costco's sales grew 8% to $62 billion. With $1.2 billion in membership fees added in, total revenue was $63.2 billion -- also up 8%. Selling, general, and administrative expenses outran sales growth, rising more than 10%, which isn't great. But surprisingly, despite all the tariffs turmoil of the last few months, merchandise costs rose less than 7.5%, allowing Costco to grow its operating income nicely -- up 14%. On the bottom line, Costco's $4.28 in per-share profit increased 13%. Free cash flow (FCF) grew nicely as well, and is now up 13% to $5.9 billion for the fiscal year to date, eclipsing reported earnings of $5.5 billion over the last nine months. Is Costco stock a buy? Tallying up the latest numbers, financial data provider S&P Global Market Intelligence tells me this is an improvement. Over the past 12 months, Costco's FCF was only $6.9 billion, so less than reported net income of $7.6 billion. Relative to the stock's $459.2 billion market cap, this means Costco stock costs 66.6 times trailing FCF, but only 60.4 times trailing earnings. Is that too expensive to buy, considering the stock is only growing profits and free cash flow in the mid-teens? In my humble opinion, it is too expensive, which is why I don't own Costco stock. It's also why I'm not benefiting from Costco stock going up 3% today. Should you invest $1,000 in Costco Wholesale right now? Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
