Back to top

Analyst Blog

Shares of Costco Wholesale Corporation (COST - Analyst Report) recorded a new 52-week high of $108.35 yesterday, before closing at $107.83, rising approximately 35.2% in a year’s span. Based on the current price, Costco is 1.6% above the Zacks Consensus average analyst price target of $106.11.

Moreover, it currently trades at a forward P/E of 23.7x, a 41.9% premium to the peer group average of 16.7x. Additionally, the company’s long-term estimated EPS growth rate is 13.2%, higher than the peer group average of 12.7%.

We believe Costco’s differentiated product range enables it to provide an upscale shopping experience to its members, resulting in market share gains and higher sales per square foot. Moreover, it maintains a healthy membership renewal rate.

Costco remains committed to opening new clubs in domestic and international markets. The company’s diversification strategy is a natural hedge against risks that may arise in specific markets.

This is evident from Costco’s healthy comparable-store sales results, when most of the retailers were struggling against the challenging macroeconomic factors including higher taxes and a soft employment scenario along with unfavorable weather conditions that restrained consumers from spending.

Costco delivered comps growth of 4% in March, reflecting comparable sales growth of 5% at its U.S. locations and 2% at international outlets.

Retailers like The Cato Corporation , Gap Inc. (GPS - Analyst Report) and The TJX Companies, Inc. (TJX - Analyst Report) witnessed comps decline of 11%, 1% and 2%, respectively during this period.

Currently, shares of Costco carry a favorable Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%