COST Inches Higher on Fresh Round of Bull Notes

The stock is back within striking distance of its record high

Deputy Editor
Oct 6, 2020 at 10:55 AM
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The shares of Costco Wholesale Corporation (NASDAQ:COST) are up 0.6% at $360.88, enjoying a boost as analysts sing its praises. Barclays upgraded the stock to "overweight" from "equal-weight," and assigned a $400 price target. The analyst cited several positive tailwinds, adding that its recent gross margin expansion will be sustainable if the big box retailer's traffic levels remain strong. Credit Suisse also chimed in, lifting its price target to $370 from $328. 

Coming into today, some members of the brokerage bunch were still cautious on COST. Seven called it a "hold, while 15 said "buy." Plus, the 12-month consensus price target of $367.52 is just a slim 1.6% premium to current levels. 

While COST did see a steep selloff from its early September all-time high of $363.67, it's been on a steady climb back up the charts, nearly touching this peak earlier in the session. The stock's 60-day moving average provided solid support for this pullback, as well as the $335 mark, which rejected Costco stock back in July. 

Option traders have also taken a slightly more bullish stance on COST. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day call/put volume ratio of 1.72, which stands higher than 76% of readings from the past 12 months. This suggests a healthier-than-usual appetite for long calls of late. 

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