Costco Wholesale (NASDAQ:COST) Shares Down 1.5% – Here’s Why

Costco Wholesale Corporation (NASDAQ:COST) traded down 1.5% on Wednesday. The company traded as low as $910.30 and last traded at $910.34. Approximately 2,206,697 shares changed hands during trading, an increase of 0% from the average session volume of 2,202,307 shares. The stock had previously closed at $924.59.

Key Costco Wholesale News

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

• Positive Sentiment: Strong fourth-quarter results: Costco reported revenue of approximately $95.72 billion, up 11.1% year over year, and earnings of $6.75 per share, exceeding consensus estimates of $6.54. The company also delivered its fifth consecutive earnings beat. Should You Buy, Hold or Sell Costco Stock After Its Q4 Earnings Beat?
• Positive Sentiment: Broad-based sales momentum: Fourth-quarter comparable sales rose 9.4%, with U.S. comparable sales up 10.7%, supported by higher traffic and larger basket sizes. Fresh food, gas, pharmacy, travel and digital sales were key contributors. Costco’s Sales Momentum Builds as Q4 Traffic and Ticket Rise
• Positive Sentiment: Membership economics remain a major strength: Membership-fee revenue increased about 11% to $5.907 billion, while executive membership penetration reached a record. High renewal rates and recurring fee income continue to support Costco’s resilient business model. Costco Earnings Call Highlights Growth, Global Expansion
• Positive Sentiment: Expansion and digital growth: Management highlighted warehouse expansion, international growth and continued e-commerce gains as avenues for extending sales momentum. COST Q3 Deep Dive: Warehouse Expansion, Membership Trends, and Digital Engagement Shape Outlook
• Neutral Sentiment: Potential stock split speculation: Costco’s high share price and strong fundamentals have made it a possible stock-split candidate, but a split would not change the company’s underlying value or earnings.
• Negative Sentiment: Valuation and analyst caution: Costco trades at a very high earnings multiple, while at least eight research firms lowered price targets after the earnings beat. Daiwa also reduced its target to $950 and maintained a Neutral rating, suggesting limited upside at current valuation levels. Analysts Cut Costco Price Targets After a Q4 Beat
• Negative Sentiment: Membership-growth concerns: Although renewal rates and fee income are strong, investors are watching whether Costco can continue attracting members and justify its valuation as warehouse expansion and member rewards pressure margins. Costco shoppers are changing in a way the retailer cannot ignore

Wall Street Analyst Weigh In

A number of research analysts have recently issued reports on the stock. Royal Bank Of Canada reaffirmed a “sector perform” rating and issued a $1,000.00 price objective on shares of Costco Wholesale in a research report on Friday, September 25th. Freedom Broker cut their price target on shares of Costco Wholesale from $1,030.00 to $1,010.00 and set a “buy” rating on the stock in a report on Friday, September 25th. UBS Group reaffirmed a “buy” rating on shares of Costco Wholesale in a research report on Thursday, September 17th. Robert W. Baird set a $1,175.00 target price on Costco Wholesale in a research report on Friday, September 25th. Finally, Citigroup initiated coverage on Costco Wholesale in a report on Thursday, June 18th. They issued a “neutral” rating and a $1,020.00 price target for the company. Twenty-two research analysts have rated the stock with a Buy rating, ten have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, Costco Wholesale presently has an average rating of “Moderate Buy” and an average price target of $1,046.27.

Costco Wholesale Stock Down 1.5%

The company has a current ratio of 1.06, a quick ratio of 0.62 and a debt-to-equity ratio of 0.11. The company has a market cap of $403.72 billion, a price-to-earnings ratio of 43.85, a PEG ratio of 3.95 and a beta of 0.86. The business has a fifty day moving average of $933.61 and a two-hundred day moving average of $966.60.

Costco Wholesale (NASDAQ:COST) last announced its earnings results on Thursday, September 24th. The retailer reported $6.75 EPS for the quarter, beating analysts’ consensus estimates of $6.54 by $0.21. The business had revenue of $95.72 billion during the quarter, compared to analysts’ expectations of $94.97 billion. Costco Wholesale had a return on equity of 27.60% and a net margin of 3.04%.The business’s revenue was up 11.1% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $5.87 earnings per share. As a group, equities analysts anticipate that Costco Wholesale Corporation will post 22.8 EPS for the current fiscal year.

Costco Wholesale Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, August 7th. Stockholders of record on Friday, July 24th were given a dividend of $1.47 per share. This represents a $5.88 annualized dividend and a dividend yield of 0.6%. The ex-dividend date was Friday, July 24th. Costco Wholesale’s dividend payout ratio (DPR) is currently 28.32%.

Hedge Funds Weigh In On Costco Wholesale

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. State Street Corp raised its stake in shares of Costco Wholesale by 31.7% in the second quarter. State Street Corp now owns 23,901,594 shares of the retailer’s stock valued at $22,359,224,000 after acquiring an additional 5,749,362 shares in the last quarter. Bank of America Corp DE increased its holdings in Costco Wholesale by 11.5% during the 1st quarter. Bank of America Corp DE now owns 7,515,031 shares of the retailer’s stock worth $7,488,203,000 after purchasing an additional 773,651 shares during the period. Diamant Asset Management Inc. raised its position in Costco Wholesale by 99,278.0% in the 1st quarter. Diamant Asset Management Inc. now owns 6,726,899 shares of the retailer’s stock valued at $672,690,000 after purchasing an additional 6,720,130 shares in the last quarter. Corient Private Wealth LLC grew its position in shares of Costco Wholesale by 838.9% during the fourth quarter. Corient Private Wealth LLC now owns 6,125,405 shares of the retailer’s stock worth $5,282,182,000 after buying an additional 5,472,968 shares in the last quarter. Finally, Invesco Ltd. lifted its stake in Costco Wholesale by 3.4% in the fourth quarter. Invesco Ltd. now owns 4,328,729 shares of the retailer’s stock worth $3,732,836,000 after acquiring an additional 143,150 shares during the last quarter. Hedge funds and other institutional investors own 68.48% of the company’s stock.

About Costco Wholesale

Costco Wholesale Corporation operates a membership-based warehouse retail business under the Costco name. The company sells a broad selection of merchandise, including groceries, fresh foods, beverages, appliances, electronics, furniture, apparel, jewelry, hardware, and seasonal products. It also offers services such as gasoline, pharmacies, optical departments, hearing-aid centers, food courts, travel services, and business delivery in selected markets.

Costco markets many products under its private-label Kirkland Signature brand and sells merchandise through warehouse locations and e-commerce platforms.