Costco's Earnings Beat Invites Plenty of Bull Notes

No less than seven analysts have lifted their price targets

Digital Content Manager
Dec 10, 2021 at 9:32 AM
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The shares of Costco Wholesale Corporation (NASDAQ:COST) are up 2.4% at $536.76 this morning, following the wholesale retailer's fiscal first-quarter earnings report. The firm reported profits of $2.98 per share on $50.36 billion in revenue, topping analysts' estimates on both fronts. Costco said the economic reopening has improved demand for high-margin items such as apparel and jewelry, while noting that it was able to mitigate a large portion of the supply chain issues and surging costs plaguing the broader retail sector. 

Analysts have been quick to chime in with price-target hikes. So far, no less than seven members of the brokerage bunch have made upward adjustments to their price objectives, including Tesley Advisory Group all the way to $610. The security was well overdue for a round of price-target hikes, as its former 12-month consensus price target of $538.83 was a slim 1% premium to last night's close. 

Several members of the brokerage bunch remain cautious, though. Of the 17 in coverage, five still consider COST a "hold." 

Options traders have been a bit more bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Costco stock sports a 50-day call/put volume ratio of 1.42, which stands higher than 69% of readings from the past year. This implies long calls are getting picked up at a slightly quicker-than-usual clip. 

When we last covered Costco stock, the retail stock had just landed on Schaeffer Senior Quantitative Analyst Rock White's best performing stocks for the month of November. True to form, the equity turned in its best monthly return since June 2019 and hit a record high of $560.78 on Nov. 29. Though the stock has cooled since then, the 30-day moving average has provided solid support on the charts, and year-to-date COST is still up nearly 40%. 


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