Jefferies lifts Costco stock price target to $1,180 from $1,145

On Friday, Jefferies analyst Corey Tarlowe increased the price target on Costco Wholesale (NASDAQ:COST) shares to $1,180, up from the previous $1,145, while reiterating a Buy rating on the stock. The adjustment follows Costco’s continued display of strong performance, characterized by robust comparable store sales and growth in membership fees. With a market capitalization of $455.7 billion and revenue of $258.8 billion, Costco maintains its position as a retail giant. According to InvestingPro data, 10 analysts have recently revised their earnings estimates upward for the upcoming period. Despite foreign exchange and other factors slightly constraining margin expansion, the company’s year-over-year trends remained positive.

Costco’s business model was highlighted for its ability to consistently deliver growth in both revenue and earnings, with current revenue growth at 5.35% and a track record of maintaining dividend payments for 22 consecutive years. This optimism comes in the wake of the company reporting solid adjusted February comparable sales growth of 8.3%. This figure stands out, especially considering the challenges other retailers are facing.

Tarlowe’s commentary on Costco’s results underscores the strength of the retailer’s business model, which seems to be well-positioned to maintain steady growth. He noted that the company’s margin expansion was positive year-over-year, despite some limiting factors, and that the solid adjusted comparable sales for February were particularly impressive given the headwinds seen at other retail outlets. InvestingPro’s analysis shows the company maintains a GOOD overall financial health score, with particularly strong marks in profitability and price momentum.

Looking forward, the analyst expressed confidence in Costco’s potential to continue reporting consistent top- and bottom-line growth. The raised price target to $1,180 reflects this positive outlook and the firm’s belief in the company’s robust business fundamentals.

Costco Wholesale’s stock price target has been raised as the company continues to exhibit favorable results, with strong comparable sales and membership fee growth. The retailer’s ability to navigate through factors that have affected other retailers and its consistent performance have contributed to Jefferies’ optimistic view and the increased price target.

In other recent news, Costco Wholesale Corp (BVMF:COWC34). reported its financial results for the second quarter of fiscal year 2025, revealing a revenue beat with $63.72 billion, surpassing analyst expectations of $63.03 billion. However, the company’s earnings per share (EPS) fell slightly short of forecasts, coming in at $4.02 against an anticipated $4.09. Despite the revenue outperformance, the EPS miss has raised concerns among investors. Membership fee income rose by 7.4%, and e-commerce sales surged by 20.9%, underscoring strong digital strategies. Additionally, Costco plans to expand its footprint with 28 new warehouses in FY2025.

In another development, Evercore ISI, a notable research firm, raised the price target for Costco shares from $1,050 to $1,100, maintaining its Outperform rating. This adjustment reflects Evercore ISI’s confidence in Costco’s ability to grow its membership base and increase store traffic. The firm noted a 5.7% increase in global traffic and a 9% rise in core comparable sales as key drivers of Costco’s success. Despite potential risks such as tariffs and wage inflation, Costco’s position remains strong, supported by its loyalty-driven business model.

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