Costco Wholesale (NASDAQ:COST) Stock Price Up 1.5% – Still a Buy?

Costco Wholesale Corporation (NASDAQ:COST) shares were up 1.5% on Friday . The stock traded as high as $949.90 and last traded at $947.74. 2,338,775 shares changed hands during mid-day trading, an increase of 7% from the average daily volume of 2,190,632 shares. The stock had previously closed at $933.51.

Key Stories Impacting Costco Wholesale

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

• Positive Sentiment: Medicare expansion creates a new growth opportunity. Costco is partnering with SCAN Group to offer Costco-branded Medicare Advantage and supplemental plans in select states. The initiative targets Costco’s large senior-member base and gives the company exposure to the approximately $600 billion Medicare market without requiring it to become a traditional insurer. Costco to Offer Medicare Plans for Older Adults
• Positive Sentiment: Costco raised its dividend by 13.1%. The increase reinforces the company’s strong cash-generation profile and may improve its appeal to income-oriented investors, although the stock’s high valuation limits its current dividend yield. Costco Just Upped Its Dividend
• Positive Sentiment: Additional monetization opportunities could support long-term growth. Analysts and commentators point to Costco’s retail-media business, AI-powered search capabilities and pharmacy operations as emerging growth engines alongside membership renewals, warehouse expansion and Kirkland Signature products. Costco Is Quietly Building Its Next Big Growth Engine
• Neutral Sentiment: Costco’s relative resilience compared with Walmart highlights its value proposition. Walmart reported weaker U.S. traffic and comparable-sales growth, while Costco was less affected, suggesting its membership model and perceived value may be helping it navigate consumer affordability pressures. Walmart Drops on Slow Same-Store Sales Growth
• Neutral Sentiment: A potential stock split is speculative. Costco shares have appreciated substantially since the prior 2-for-1 split 26 years ago. A future split could improve accessibility and trading liquidity, but it would not change the company’s underlying value or fundamentals. Costco Stock Split Analysis
• Negative Sentiment: Valuation and modest earnings pressure remain risks. Costco trades at a lofty earnings multiple, while its latest quarterly EPS narrowly missed estimates despite revenue exceeding expectations. That premium leaves less room for disappointment if membership growth, margins or consumer spending weaken.
• Negative Sentiment: The Medicare initiative will require execution. Entering a regulated, competitive insurance market could diversify revenue, but the pilot’s limited geographic rollout and potential healthcare-related complexity mean meaningful financial benefits may take time to develop. Costco Enters the Medicare Insurance Market

Wall Street Analyst Weigh In

A number of equities analysts have recently issued reports on COST shares. Oppenheimer upped their price target on Costco Wholesale from $1,100.00 to $1,160.00 and gave the stock an “outperform” rating in a research report on Tuesday, May 19th. Guggenheim reissued a “neutral” rating on shares of Costco Wholesale in a research report on Monday, June 1st. DA Davidson reissued a “neutral” rating and issued a $1,000.00 price objective on shares of Costco Wholesale in a research report on Thursday, June 4th. Sanford C. Bernstein boosted their target price on Costco Wholesale from $1,192.00 to $1,194.00 and gave the stock an “outperform” rating in a research note on Friday, May 29th. Finally, BTIG Research reaffirmed a “buy” rating and set a $1,125.00 target price on shares of Costco Wholesale in a research report on Friday, May 29th. Twenty-two investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus target price of $1,059.53.

Costco Wholesale Stock Up 1.5%

The company has a market capitalization of $420.30 billion, a price-to-earnings ratio of 47.67, a PEG ratio of 4.51 and a beta of 0.87. The company has a debt-to-equity ratio of 0.17, a quick ratio of 0.61 and a current ratio of 1.07. The business’s 50 day moving average is $947.14 and its 200 day moving average is $980.95.

Costco Wholesale (NASDAQ:COST) last issued its quarterly earnings results on Thursday, May 28th. The retailer reported $4.93 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.94 by ($0.01). The company had revenue of $70.53 billion for the quarter, compared to analyst estimates of $70.12 billion. Costco Wholesale had a net margin of 3.01% and a return on equity of 28.04%. During the same quarter in the previous year, the company posted $4.28 EPS. Sell-side analysts anticipate that Costco Wholesale Corporation will post 20.42 earnings per share for the current year.

Costco Wholesale Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 7th. Stockholders of record on Friday, July 24th were issued a dividend of $1.47 per share. The ex-dividend date of this dividend was Friday, July 24th. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. Costco Wholesale’s payout ratio is 29.58%.

Insider Activity

In related news, Director Kenneth D. Denman sold 885 shares of the firm’s stock in a transaction on Tuesday, June 23rd. The stock was sold at an average price of $957.45, for a total value of $847,343.25. Following the completion of the transaction, the director owned 4,779 shares in the company, valued at $4,575,653.55. This trade represents a 15.62% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. 0.10% of the stock is currently owned by insiders.

Institutional Trading of Costco Wholesale

Large investors have recently added to or reduced their stakes in the company. World Investment Advisors boosted its position in Costco Wholesale by 8.4% during the fourth quarter. World Investment Advisors now owns 20,081 shares of the retailer’s stock worth $15,835,000 after purchasing an additional 1,560 shares in the last quarter. Sarasin & Partners LLP grew its holdings in Costco Wholesale by 6.9% in the second quarter. Sarasin & Partners LLP now owns 214,194 shares of the retailer’s stock valued at $200,372,000 after purchasing an additional 13,795 shares during the period. Perryman Financial Advisory Inc. AD purchased a new stake in shares of Costco Wholesale in the fourth quarter valued at approximately $9,300,000. Retail Employees Superannuation Pty Ltd as trustee for Retail Employees Superannuation Trust purchased a new stake in shares of Costco Wholesale in the fourth quarter valued at approximately $5,813,000. Finally, Hyperion Asset Management Ltd raised its stake in shares of Costco Wholesale by 9.0% during the 2nd quarter. Hyperion Asset Management Ltd now owns 68,762 shares of the retailer’s stock worth $64,325,000 after buying an additional 5,656 shares during the period. Hedge funds and other institutional investors own 68.48% of the company’s stock.

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.