Analyst raises price target for Costco after strong earnings

From CNBC: 2024-09-26 20:36:21

Costco reported quarterly results slightly below expectations, but strong profitability led to an earnings beat. Total revenue in Q4 was $79.7 billion, up 1% year over year. Earnings per share were $5.29, topping forecasts of $5.08. Membership demographics show a younger base. Consumer interest in value keeps attracting customers.

Costco’s stock price edged lower in extended trading, despite its solid topline growth. Gross margins in the fourth quarter were improved, with 6.9% growth in adjusted same-store sales. The company’s focus on value and member loyalty continues to drive success, with stock performance seeing a 37% increase this year. Analysts raise target price to $950.

Membership fee income was slightly lower, but the recent fee hike’s impact will be minimal early on, with benefits to be seen in the back half of fiscal year 2025 and into 2026. Price reductions on Kirkland Signature products and sustainability efforts helped cut prices on various items. Overall, Costco remains a top destination for value seekers.



Read more at CNBC:: We’re upping our price target on Costco after another steady quarter fortifies our thesis