Costco Thrives with Impressive Market Growth
Costco Wholesale Corporation (COST), based in Issaquah, Washington, operates membership-based warehouse stores. With a market capitalization of $412.1 billion, the company offers a wide array of products, including food, automotive supplies, toys, hardware, and more.
In the last year, shares of this retail giant have significantly outperformed the overall market. COST has surged 59.8%, while the S&P 500 Index ($SPX) has climbed nearly 30.1%. So far in 2024, COST stock has risen 40.6%, outpacing the SPX’s 24.1% gain year-to-date.
When comparing COST to the SPDR S&P Retail ETF (XRT), the difference is even more striking. The ETF has increased about 22% over the past year. Additionally, COST’s strong year-to-date results show a 10% increase compared to the ETF’s 7.3% rise.
Costco’s growth can be linked to its responsiveness to market trends and changing consumer needs. The company frequently updates its product line and expands both its physical stores and online shopping capabilities. Recent jumps in e-commerce sales and membership fees highlight Costco’s strategic focus on growth and profitability.
On September 26, COST’s shares fell slightly following the release of its fourth-quarter results. The adjusted earnings per share (EPS) grew by 8.8% year-over-year, reaching $5.29. However, the company’s revenue of $79.7 billion fell short of analysts’ expectations of $79.8 billion.
Looking ahead, analysts anticipate a 10.2% increase in COST’s EPS, expecting it to reach $17.75 for the fiscal year ending in August 2025. Impressively, Costco has beaten the consensus earnings estimates in each of the last three quarters.
Currently, 33 analysts are covering COST stock, with a consensus rating of “Moderate Buy.” This is based on 18 “Strong Buy” recommendations, three “Moderate Buys,” and 12 “Holds.”
This outlook has become more optimistic since last month, as 17 analysts are now recommending a “Strong Buy.”
On November 18, BMO Capital analyst Kelly Bania maintained an “Outperform” rating while increasing the price target for COST to $1,075, indicating a possible upside of 15.8% from current levels. The average price target stands at $946.23, suggesting a 2% premium over COST’s current price. The highest target of $1,065 indicates a potential upside of 14.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
