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Investing.com - Costco Wholesale (NASDAQ:COST) reported accelerated comparable sales growth in October, with total comps rising to 6.7% from 5.7% in September. This growth comes as the retail giant, with a market capitalization of $406.5 billion, continues to demonstrate solid revenue expansion of 8.17% over the last twelve months.
U.S. comparable sales reached 6.6% in October, showing improvement from the 5.1% growth recorded in September. When excluding the impacts of foreign currency fluctuations and gasoline prices, U.S. comps increased by 6.7%, up from 5.0% the previous month.
Total comparable sales excluding foreign currency and gas price effects rose to 6.8% in October compared to 6.0% in September, demonstrating broad-based growth across the retailer’s operations.
The sales acceleration occurred despite approximately 100 basis points of pressure resulting from last year’s pull-forward effect, when consumers stocked up in September 2023 ahead of Hurricane Helene and East coast port strikes.
DA Davidson maintained its Neutral rating on Costco stock with a $1,000.00 price target following the October sales report. According to InvestingPro data, Costco currently trades at a P/E ratio of nearly 50, which is high relative to its near-term earnings growth. The company is currently trading above its Fair Value estimate, though it maintains strong financial health with more cash than debt on its balance sheet. Investors can access 14 additional ProTips and comprehensive analysis in the Pro Research Report available with an InvestingPro subscription.
In other recent news, Costco Wholesale reported strong comparable sales performance in October, which was positively noted by William Blair, who reiterated an Outperform rating for the company. The firm praised Costco’s merchandising strategy, emphasizing its shift towards apparel and home goods. Meanwhile, Bernstein adjusted its price target for Costco to $1,134 from $1,140, maintaining an Outperform rating, and highlighted the company’s valuation pullback. Oppenheimer also lowered its price target to $1,050 from $1,130 but kept an Outperform rating, re-adding Costco to its top pick ranking due to its recent stock performance. BTIG initiated coverage on Costco with a Buy rating and a $1,115 price target, citing the company’s strong customer loyalty as a driver for future growth. Bernstein reiterated its Outperform rating with a $1,140 price target, acknowledging challenges in year-over-year comparisons but noting sustained demand in certain categories. These developments reflect ongoing confidence in Costco’s business strategy and market position.
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