Sluggish Sales Growth Sends Costo Stock Lower

Costco posted a top- and bottom-line beat however

Deputy Editor
Mar 4, 2022 at 10:25 AM
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While Costo Wholesale Corporation (NASDAQ:COST) saw a mostly upbeat fiscal second-quarter report, posting earnings and revenue that topped analysts' estimates, a drop in same-store sales growth is hurting the shares this morning. Specifically, Costco stock saw a 14.4% rise for the quarter, which exceeded expectations but fell below its first-quarter rise of 14.9%. The big box retailer said an earlier-than-usual Lunar New Year put some weight on its sales this February, and as a result, the stock was last seen down 2.9% at $517.51. 

The equity recently saw a breakout from its 60-day moving average, which acted as a ceiling since early January. Now, COST is trading back below this trendline, though it still sports a year-over-year lead of 63.8%. 

Several members of the brokerage bunch have chimed in. So far, no less than four analysts have lifted their price targets, including Tesley to $615 from $610, which Truist Securities cut its price target to $603 from $606. The majority of analysts were optimistic heading into today, with 14 calling the stock a "buy" or better, and five saying "hold." Meanwhile, the 12-month consensus price target of $558.09 is an 8.7% premium to current levels. 

The report has helped to shake up Costco stock's options pits. So far, 17,000 calls and 15,000 puts have exchanged hands, which is six times the intraday average. The most popular contract is the weekly 3/4 535-strike call, where positions are being sold to open, followed by the 500-strike put in the same weekly series. 


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