U.S.-Japan trade pact; Alphabet, Tesla to report - what’s moving markets
On Thursday, Loop Capital analysts raised the price target for Costco Wholesale (NASDAQ: COST) stock to $1,170 from the previous target of $1,110, maintaining a Buy rating. The decision follows the company’s strong international same-store sales growth, which surpassed both their estimates and market consensus. Currently trading near its 52-week high of $1,078, with a market capitalization of $467 billion, InvestingPro analysis suggests the stock is trading above its Fair Value.
Costco’s core same-store sales for May increased by 6%, while other international sales rose by 8%, exceeding the expected 5% growth. The impact of foreign exchange was less negative than previously anticipated, contributing to the positive outlook. This performance aligns with the company’s robust revenue growth of 5.94% over the last twelve months, and InvestingPro data shows an impressive "GREAT" financial health score.
The analysts noted that Costco has been slow to pass on cost increases, which they believe is helping the company gain market share. They expect this trend to continue as inflation affects products impacted by tariffs. Over time, Costco is expected to adjust to market pricing trends to maintain its usual margin levels.
Despite these positive developments, Loop Capital’s fiscal 2025 earnings per share estimate for Costco is $17.96, which is 16 cents below the consensus. The analysts anticipate that Costco will absorb some inflation in the near term, affecting earnings slightly.
In other recent news, Costco Wholesale Corporation (NASDAQ:COST) reported a 6.8% increase in sales for May, reaching $20.97 billion, up from $19.64 billion the previous year. The company’s net sales for the first 39 weeks of its fiscal year rose by 8.0% to $201.02 billion. E-commerce sales also showed robust growth, with an 11.6% increase in the four-week period and a 15.8% rise over the 39 weeks. Analysts at TD Cowen raised their price target for Costco to $1,175, maintaining a Buy rating, citing consistent traffic growth and strong sales momentum. Meanwhile, UBS analyst Michael Lasser affirmed a Buy rating with a $1,205 target, highlighting Costco’s resilience and potential for continued growth. DA Davidson maintained a Neutral rating with a $1,000 target, noting modest outperformance in revenue and earnings for the third quarter. Mizuho (NYSE:MFG) also kept a Neutral rating with a $975 target, observing a slowdown in U.S. comparable sales but strong international sales. These developments reflect Costco’s ongoing performance and strategic positioning in the market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.