Costco Wholesale Corporation (COST), headquartered in Issaquah, Washington, engages in the operation of membership warehouses. With a market cap of $412.1 billion, the company sells all kinds of food, automotive supplies, toys, hardware, sporting goods, jewelry, electronics, apparel, health, and beauty aids, as well as other goods.
Shares of this discount stores giant have outperformed the broader market considerably over the past year. COST has gained 59.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 30.1%. In 2024, COST stock is up 40.6%, surpassing the SPX’s 24.1% rise on a YTD basis.
Zooming in further, COST’s outperformance is also apparent compared to the SPDR S&P Retail ETF (XRT). The exchange-traded fund has gained about 22% over the past year. Moreover, COST’s double-digit returns on a YTD basis outshine the ETF’s 7.3% gains over the same time frame.
Costco's success can be attributed to its ability to stay ahead of market trends and cater to consumer preferences. By regularly updating its product offerings and expanding its presence both in physical locations and online, Costco has been able to remain competitive in the retail industry. The company's recent increase in e-commerce sales and membership fees reflect its strategic approach to driving growth and profitability.
On Sep. 26, COST shares closed down marginally after reporting its Q4 results. Its adjusted EPS increased 8.8% year over year to $5.29. The company’s revenue was $79.7 billion, missing Wall Street forecasts of $79.8 billion.
For the current fiscal year, ending in August 2025, analysts expect COST’s EPS to grow 10.2% to $17.75 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last three quarters.
Among the 33 analysts covering COST stock, the consensus is a “Moderate Buy.” That’s based on 18 “Strong Buy” ratings, three “Moderate Buys,” and 12 “Holds.”
This configuration is more bullish than a month ago, with 17 analysts suggesting a “Strong Buy.”
On Nov. 18, BMO Capital analyst Kelly Bania kept an “Outperform” rating and raised the price target on COST to $1,075, implying a potential upside of 15.8% from current levels.
The mean price target of $946.23 represents an 2% premium to COST’s current price levels. The Street-high price target of $1065 suggests an upside potential of 14.8%.
