Costco Stock Rebounds on Strong December Sales

Several analysts chimed in with bull notes

Digital Content Manager
Jan 6, 2023 at 8:50 AM
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Costco Wholesale Corporation (NASDAQ:COST) is working to erase yesterday's pullback, up 2.3% at $460.34 before the bell, following the release of the retailer's December sales results. Costco posted net sales of $23.80 billion last month, marking a 7% year-over-year increase. 

In response, UBS lifted its price target to $600 from $565, while D.A. Davidson raised its price target by $8 to $478. The 12-month consensus price target already sits at $551.77, which is a 22.6% premium to last night's close. Meanwhile, 17 of the 22 in coverage call COST a "buy" or better. 

Options players aren't nearly as optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COST sports a 10-day put/call volume ratio of 1.22, which sits in the 86th percentile of its 12-month range. In other words, puts have been more popular than usual. 

With overhead pressure at the 10-day moving average keeping a lid on shares, COST fell back toward its Jan. 3, nearly seven-month low of $447.90. The stock has been on a downward spiral after a rally failed at the $542 mark, putting shares at an 18.1% year-over-year deficit. However, the equity is sitting firmly in "oversold" territory -- with a 14-day Relative Strength Index (RSI) of 21 -- meaning a short-term bounce could be right on the horizon. 

 

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