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Investing.com - DA Davidson maintained its Neutral rating and $1,000 price target on Costco Wholesale (NASDAQ:COST), a $435.5 billion market cap retailer, following the company’s June comparable sales report. According to InvestingPro analysis, the stock currently trades above its Fair Value, with a P/E ratio of 55.3x.
The warehouse club reported headline total comparable sales growth of 6.2% excluding gas and foreign exchange effects, slightly ahead of May’s 6.0% figure. U.S. comparable sales excluding gas and foreign exchange matched May’s performance at 5.5%.
Total (EPA:TTEF) comparable sales reached 5.8% in June, accelerating from 4.3% in April, while U.S. comparable sales improved to 4.7% from 4.1% in the previous month.
DA Davidson noted that traffic growth has declined to low-single digits after a stronger start to calendar 2025, despite lower gas prices, though this concern is partially offset by accelerating ticket growth. The firm also highlighted that cannibalization impacted results by 60 basis points in June, down slightly from 70 basis points in May.
The investment firm maintained its Neutral stance, citing Costco’s premium valuation at 51 times consensus next-twelve-month earnings estimates, with analysts indicating they are looking for a better entry point for the stock.
In other recent news, Costco Wholesale reported an 8% increase in net sales for June, reaching $26.44 billion, up from $24.48 billion in the same period last year. This growth reflects strong consumer demand, with comparable sales rising 5.8% company-wide and e-commerce sales jumping by 11.5%. For the first 44 weeks of its fiscal year, Costco’s net sales reached $227.46 billion, marking another 8% increase. In regional performance, international markets outside Canada saw the most significant growth at 10.9%, while U.S. sales rose 4.7%. In a separate development, Lululemon (NASDAQ:LULU) filed a lawsuit against Costco, accusing the retailer of selling unauthorized copies of its products under the Kirkland brand. Additionally, BMO Capital reiterated its Outperform rating for Costco, citing enhancements to its membership value, such as new perks for Executive members and a standalone gas station test. UBS also maintained a Buy rating, highlighting Costco’s pilot program for extended shopping hours as a sign of continued growth potential, despite concerns over the company’s premium valuation.
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