UBS maintains Buy rating and $1,205 target on Costco stock

On Thursday, UBS analyst Michael Lasser maintained a Buy rating on Costco Wholesale (NASDAQ:COST) with a steadfast price target of $1,205.00. The retail giant, currently valued at $444 billion in market capitalization, has been drawing significant attention from analysts. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period, signaling growing confidence in the company’s prospects. Lasser praised the retailer for its robust momentum amidst various economic challenges, noting that Costco’s core comparable sales growth, excluding foreign exchange and fuel, stood at 6.7%. This performance is particularly noteworthy considering the adjustments for the calendar shift of Easter, which would place the figure closer to 8.5%. The company’s strong execution is reflected in its impressive financial metrics, with revenue reaching $264 billion in the last twelve months and maintaining a healthy revenue growth rate of 6.1%.

Costco’s consistency was highlighted through a comparison with its March sales, which were around 9%. The company’s ability to maintain strong momentum into April suggests that its market share gains are ongoing. Lasser pointed out that Costco likely captured a significant portion of the market in discretionary categories, as evidenced by its mid-single to high-single-digit percentage growth in non-foods comparable sales. This growth rate aligns with the low-double-digit trend observed in previous months once the calendar shift is accounted for.

The analyst’s comments underscore Costco’s resilience and adaptability in the face of concerns about consumer confidence and external pressures such as tariffs. While InvestingPro analysis suggests the stock is trading above its Fair Value, the company’s strong financial health score and consistent performance have helped maintain investor confidence. For deeper insights into Costco’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. The company’s performance indicates a continued trend of share gains, reinforcing its position in the competitive retail landscape. Costco’s ability to attract and retain customers, even during periods of economic uncertainty, is a testament to its business model and strategic initiatives.

Investors and market watchers may take note of Costco’s ability to outperform in a challenging environment, as the company continues to demonstrate strong sales growth and market share expansion. The retailer’s focus on value and efficiency appears to be resonating with consumers, allowing it to navigate through potential headwinds effectively.

UBS’s reiteration of the Buy rating and price target reflects confidence in Costco’s ongoing success and potential for continued growth. The retailer’s performance is a positive indicator for its future prospects, as it continues to execute its strategy and capitalize on market opportunities. This optimism is supported by the company’s impressive year-to-date return of 10.2% and its track record of maintaining dividend payments for 22 consecutive years. InvestingPro subscribers can access additional insights through 12 more exclusive ProTips and detailed financial metrics that help paint a complete picture of Costco’s investment potential.

In other recent news, Costco Wholesale Corporation announced a 7% increase in April net sales, reaching $21.18 billion compared to $19.80 billion during the same period last year. For the 35-week period ending May 4, 2025, the company reported net sales of $180.05 billion, marking an 8.2% rise from the previous year. Additionally, Costco raised its quarterly dividend from $1.16 to $1.30 per share, indicating an annualized payout of $5.20. Analysts have weighed in on Costco’s performance, with Telsey Advisory Group maintaining an Outperform rating and a price target of $1,100, citing robust March sales that exceeded expectations. DA Davidson, on the other hand, reiterated a Neutral rating with a price target of $1,000, noting the positive impact of an additional shopping day due to Easter. Despite challenges such as gas price fluctuations and foreign exchange impacts, Costco’s core merchandise comparable sales showed strong growth, highlighting the company’s effective execution. The increase in dividend payout reflects Costco’s confidence in its financial stability and commitment to returning capital to shareholders. These developments underscore Costco’s ability to maintain strong sales momentum and market share gains in a challenging retail environment.

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