Costco Wholesale (NASDAQ:COST) Stock Price Down 2.5% – Should You Sell?

Costco Wholesale Corporation (NASDAQ:COST) shares traded down 2.5% during mid-day trading on Tuesday . The stock traded as low as $996.16 and last traded at $1,002.93. 2,699,908 shares traded hands during trading, an increase of 28% from the average session volume of 2,105,494 shares. The stock had previously closed at $1,028.24.

Costco Wholesale News Roundup

Here are the key news stories impacting Costco Wholesale this week:

• Positive Sentiment: Costco reported stronger-than-expected sales, including U.S. same-store sales growth of 9.8% and adjusted comparable sales up 6.6%, showing that demand remains resilient even in a pressured consumer environment.
• Positive Sentiment: Revenue came in above Wall Street expectations, with $70.53 billion in quarterly sales versus estimates of $69.68 billion, reinforcing the company’s ability to keep growing at scale.
• Positive Sentiment: Membership and gas-related traffic appear to be supporting results, with higher fuel prices bringing more shoppers into warehouses and boosting basket sizes and same-store sales.
• Neutral Sentiment: EPS of $4.93 was slightly below the consensus estimate of $4.98, making the report mixed rather than uniformly strong, even though profits still improved year over year.
• Neutral Sentiment: Several pre-earnings articles framed Costco as a high-quality defensive retailer with a premium valuation, suggesting investors may continue to focus on whether the stock can justify its elevated multiple.
• Negative Sentiment: The small earnings miss could temper enthusiasm in the near term, especially given the stock’s recent run-up and the market’s high expectations heading into the print.

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on the stock. JPMorgan Chase & Co. lifted their target price on shares of Costco Wholesale from $1,060.00 to $1,110.00 and gave the stock an “overweight” rating in a research note on Friday, April 17th. Truist Financial lifted their target price on shares of Costco Wholesale from $926.00 to $977.00 and gave the stock a “hold” rating in a research note on Friday, March 6th. Citigroup reaffirmed a “neutral” rating on shares of Costco Wholesale in a research note on Friday, February 20th. Deutsche Bank Aktiengesellschaft lifted their target price on shares of Costco Wholesale from $1,104.00 to $1,106.00 and gave the stock a “buy” rating in a research note on Thursday, May 7th. Finally, UBS Group lifted their target price on shares of Costco Wholesale from $1,205.00 to $1,275.00 and gave the stock a “buy” rating in a research note on Wednesday, May 20th. Twenty-two investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Costco Wholesale presently has an average rating of “Moderate Buy” and an average price target of $1,052.60.

Costco Wholesale Stock Down 0.8%

The company has a current ratio of 1.06, a quick ratio of 0.59 and a debt-to-equity ratio of 0.18. The company has a market capitalization of $441.52 billion, a price-to-earnings ratio of 51.75, a price-to-earnings-growth ratio of 4.94 and a beta of 0.92. The firm’s fifty day simple moving average is $1,008.28 and its two-hundred day simple moving average is $962.53.

Costco Wholesale (NASDAQ:COST) last posted its earnings results on Thursday, May 28th. The retailer reported $4.93 earnings per share for the quarter, missing the consensus estimate of $4.98 by ($0.05). The firm had revenue of $70.53 billion during the quarter, compared to analyst estimates of $69.68 billion. Costco Wholesale had a net margin of 2.99% and a return on equity of 28.57%. During the same quarter in the previous year, the firm earned $4.28 earnings per share. Sell-side analysts anticipate that Costco Wholesale Corporation will post 20.33 EPS for the current year.

Costco Wholesale Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 15th. Shareholders of record on Friday, May 1st were issued a $1.47 dividend. This represents a $5.88 annualized dividend and a yield of 0.6%. The ex-dividend date was Friday, May 1st. This is a positive change from Costco Wholesale’s previous quarterly dividend of $1.30. Costco Wholesale’s dividend payout ratio (DPR) is presently 30.58%.

Insiders Place Their Bets

In other Costco Wholesale news, EVP Claudine Adamo sold 730 shares of the business’s stock in a transaction dated Monday, March 9th. The shares were sold at an average price of $1,003.02, for a total value of $732,204.60. Following the transaction, the executive vice president directly owned 6,121 shares in the company, valued at $6,139,485.42. The trade was a 10.66% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. 0.10% of the stock is owned by insiders.

Institutional Trading of Costco Wholesale

Hedge funds and other institutional investors have recently modified their holdings of the business. Diamant Asset Management Inc. lifted its position in Costco Wholesale by 99,278.0% in the first quarter. Diamant Asset Management Inc. now owns 6,726,899 shares of the retailer’s stock valued at $672,690,000 after buying an additional 6,720,130 shares during the last quarter. Norges Bank acquired a new position in Costco Wholesale in the fourth quarter valued at about $5,195,415,000. Corient Private Wealth LLC lifted its position in Costco Wholesale by 838.9% in the fourth quarter. Corient Private Wealth LLC now owns 6,125,405 shares of the retailer’s stock valued at $5,282,182,000 after buying an additional 5,472,968 shares during the last quarter. Cardano Risk Management B.V. lifted its position in Costco Wholesale by 907.1% in the fourth quarter. Cardano Risk Management B.V. now owns 1,785,080 shares of the retailer’s stock valued at $1,539,346,000 after buying an additional 1,607,833 shares during the last quarter. Finally, Assenagon Asset Management S.A. lifted its position in Costco Wholesale by 1,586.8% in the fourth quarter. Assenagon Asset Management S.A. now owns 1,137,436 shares of the retailer’s stock valued at $980,857,000 after buying an additional 1,070,005 shares during the last quarter. 68.48% of the stock is owned by institutional investors and hedge funds.

Costco Wholesale Company Profile

Costco Wholesale Corporation operates a global chain of membership-only warehouse clubs that sell a wide array of merchandise in bulk at discounted prices. The company’s product mix includes groceries, fresh and frozen food, household goods, electronics, apparel, and seasonal items, augmented by its prominent private-label brand, Kirkland Signature. Costco’s business model centers on annual membership fees and high-volume, low-margin sales, designed to drive repeat purchasing and strong customer loyalty among both consumers and small-business buyers.

Beyond merchandise, Costco provides a range of ancillary services that complement its warehouses, including gasoline stations, pharmacy and optical services, hearing aid centers, photo services, and travel and insurance products.