Costco Wholesale (NASDAQ:COST) Stock Falls 1.5% – Here’s Why

Costco Wholesale Corporation (NASDAQ:COST)’s stock price fell 1.5% on Friday. The stock traded as low as $1,002.68 and last traded at $1,003.32. 2,106,119 shares traded hands during mid-day trading, a decline of 4% from the average session volume of 2,187,460 shares. The stock had previously closed at $1,018.21.

Key Headlines Impacting Costco Wholesale

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

• Positive Sentiment: Analyst support remains strong. CICC initiated coverage with an Outperform rating, while Tigress Financial raised its price target to $1,250. Erste Group also increased its FY2028 EPS estimate to $25.07 from $25.01, above the current-year consensus estimate of $22.70. CICC coverage article Tigress Financial price target article
• Positive Sentiment: Growth and customer engagement remain key positives. Costco’s membership model has delivered substantial long-term shareholder returns, and the company is reportedly using purchasing data to better target high-spending members. REJURAN Cosmetics is also expanding through Costco’s first Beauty Table program, potentially adding traffic and broadening its premium beauty offering. Costco customer spending article REJURAN retail expansion article
• Neutral Sentiment: Long-term growth screens are favorable, and analysts’ average recommendation is equivalent to a Buy. However, these reports largely reiterate existing optimism rather than provide a new earnings catalyst. Zacks growth stock article
• Negative Sentiment: Valuation and competition remain concerns. Costco trades at a high earnings multiple, leaving the stock sensitive to profit-taking or disappointing growth. Kroger is planning major investments and price cuts to win back market share from Costco and Walmart, which could intensify grocery competition and pressure margins. Kroger competition article

Analysts Set New Price Targets

A number of brokerages have recently issued reports on COST. BMO Capital Markets reiterated an “outperform” rating on shares of Costco Wholesale in a research note on Friday, September 25th. TD Cowen reissued a “buy” rating on shares of Costco Wholesale in a report on Friday, September 25th. Deutsche Bank Aktiengesellschaft reduced their price objective on shares of Costco Wholesale from $1,091.00 to $1,079.00 and set a “buy” rating for the company in a research report on Monday, September 28th. Royal Bank Of Canada reaffirmed a “sector perform” rating and issued a $1,000.00 price objective on shares of Costco Wholesale in a report on Friday, October 9th. Finally, Roth Capital reiterated a “sell” rating and set a $781.00 target price on shares of Costco Wholesale in a research report on Friday, September 25th. Twenty-five investment analysts have rated the stock with a Buy rating, eight 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 $1,086.19.

Costco Wholesale Trading Down 1.5%

The company has a quick ratio of 0.62, a current ratio of 1.06 and a debt-to-equity ratio of 0.11. The business has a fifty day simple moving average of $937.96 and a 200 day simple moving average of $963.21. The company has a market cap of $444.60 billion, a price-to-earnings ratio of 48.33, a P/E/G ratio of 4.29 and a beta of 0.88.

Costco Wholesale (NASDAQ:COST) last issued its earnings results on Thursday, September 24th. The retailer reported $6.75 EPS for the quarter, topping the consensus estimate of $6.54 by $0.21. The company had revenue of $95.72 billion for the quarter, compared to analyst estimates of $94.97 billion. Costco Wholesale had a net margin of 3.04% and a return on equity of 27.60%. The business’s revenue was up 11.1% on a year-over-year basis. During the same period in the previous year, the firm earned $5.87 EPS. On average, equities analysts anticipate that Costco Wholesale Corporation will post 22.70 EPS for the current fiscal year.

Costco Wholesale Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, November 13th. Investors of record on Friday, October 30th will be paid a $1.47 dividend. The ex-dividend date is Friday, October 30th. This represents a $5.88 annualized dividend and a dividend yield of 0.6%. Costco Wholesale’s dividend payout ratio (DPR) is 28.32%.

Insider Transactions at Costco Wholesale

In related news, EVP William Richard Wilcox sold 1,100 shares of the business’s stock in a transaction dated Tuesday, October 13th. The shares were sold at an average price of $958.21, for a total transaction of $1,054,031.00. Following the sale, the executive vice president owned 3,094 shares of the company’s stock, valued at approximately $2,964,701.74. The trade was a 26.23% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, EVP Claudine Adamo sold 2,200 shares of the company’s stock in a transaction dated Tuesday, September 29th. The stock was sold at an average price of $915.93, for a total transaction of $2,015,046.00. Following the transaction, the executive vice president owned 7,134 shares in the company, valued at $6,534,244.62. The trade was a 23.57% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.10% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Costco Wholesale

A number of institutional investors and hedge funds have recently modified their holdings of the company. Contravisory Investment Management Inc. grew its holdings in Costco Wholesale by 107.7% in the third quarter. Contravisory Investment Management Inc. now owns 27 shares of the retailer’s stock valued at $25,000 after purchasing an additional 14 shares during the last quarter. C M Bidwell & Associates Ltd. acquired a new position in shares of Costco Wholesale during the 2nd quarter worth $28,000. Burk Holdings LLC acquired a new position in shares of Costco Wholesale during the 2nd quarter worth $30,000. Manning & Napier Advisors LLC acquired a new position in shares of Costco Wholesale during the 2nd quarter worth $30,000. Finally, Bullseye Investment Management LLC purchased a new stake in shares of Costco Wholesale in the 2nd quarter worth about $35,000. Institutional investors and hedge funds 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 merchandise in bulk and at competitive prices through warehouse clubs and e-commerce platforms, serving individual consumers, businesses and other organizations.

Its product selection includes groceries and fresh foods, household supplies, appliances, electronics, furniture, apparel, health and beauty products, jewelry, automotive products and prescription drugs. Costco also provides services such as optical care, pharmacy services, hearing-aid sales, travel offerings and fuel sales, depending on location.

The company traces its roots to Price Club, which opened in San Diego in 1976.