Costco Wholesale (NASDAQ:COST) Stock Price Down 2% – Should You Sell?

Costco Wholesale Corporation (NASDAQ:COST) dropped 2% during mid-day trading on Tuesday. The stock traded as low as $1,019.08 and last traded at $1,019.26. Approximately 1,845,935 shares were traded during trading, a decline of 16% from the average daily volume of 2,195,377 shares. The stock had previously closed at $1,040.55.

Costco Wholesale News Roundup

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

• Positive Sentiment: JPMorgan raised its price target to $1,150 from $1,015 and maintained an Overweight rating, citing potential upside from the current level. JPMorgan analyst recommendations
• Positive Sentiment: October net sales increased 12.6% year over year to $24.50 billion. U.S. comparable sales also rose 12.6%; Bank of America noted that U.S. comps were up 8.1% after adjusting for gasoline price changes and maintained its Buy rating. The strong sales momentum is a key near-term catalyst. Costco October sales results Bank of America rating and U.S. comparable sales
• Negative Sentiment: Valuation concerns persist after Costco’s rally: some commentary argues the stock’s elevated earnings multiple leaves limited room for disappointment. Citi maintained a Hold rating and $1,020 price target, below the recently quoted share price. Citi rating and price target Costco valuation discussion

Analyst Ratings Changes

Several analysts recently issued reports on COST shares. Royal Bank Of Canada reissued a “sector perform” rating and issued a $1,000.00 target price on shares of Costco Wholesale in a research note on Friday, October 9th. TD Cowen started coverage on shares of Costco Wholesale in a research report on Friday, October 30th. They issued a “strong-buy” rating on the stock. DA Davidson raised their price objective on Costco Wholesale from $1,000.00 to $1,040.00 and gave the company a “neutral” rating in a research report on Friday, September 25th. BTIG Research reaffirmed a “buy” rating and issued a $1,125.00 target price on shares of Costco Wholesale in a report on Wednesday, September 23rd. Finally, Evercore reaffirmed an “outperform” rating on shares of Costco Wholesale in a report on Tuesday, September 22nd. One research analyst has rated the stock with a Strong Buy rating, twenty-four have assigned a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus price target of $1,090.55.

Costco Wholesale Price Performance

The company has a current ratio of 1.06, a quick ratio of 0.62 and a debt-to-equity ratio of 0.11. The company has a market capitalization of $472.19 billion, a PE ratio of 51.17, a price-to-earnings-growth ratio of 4.47 and a beta of 0.85. The stock’s 50-day moving average is $950.04 and its two-hundred day moving average is $972.05.

Costco Wholesale (NASDAQ:COST) last released its quarterly earnings data on Thursday, September 24th. The retailer reported $6.75 earnings per share (EPS) for the quarter, beating the consensus estimate of $6.54 by $0.21. Costco Wholesale had a net margin of 3.04% and a return on equity of 27.60%. The company had revenue of $95.72 billion during the quarter, compared to analysts’ expectations of $94.97 billion. During the same period in the previous year, the company earned $5.87 EPS. The firm’s quarterly revenue was up 11.1% on a year-over-year basis. On average, equities analysts predict that Costco Wholesale Corporation will post 22.70 EPS for the current year.

Costco Wholesale Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, November 13th. Investors of record on Friday, October 30th will be issued a dividend of $1.47 per share. The ex-dividend date of this dividend is Friday, October 30th. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. Costco Wholesale’s payout ratio is 28.32%.

Insider Buying and Selling at Costco Wholesale

In related news, EVP Claudine Adamo sold 2,200 shares of Costco Wholesale stock in a transaction on Tuesday, September 29th. The shares were sold at an average price of $915.93, for a total value of $2,015,046.00. Following the sale, the executive vice president owned 7,134 shares of the company’s stock, valued at approximately $6,534,244.62. This trade represents a 23.57% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP William Richard Wilcox sold 1,100 shares of Costco Wholesale stock in a transaction dated Tuesday, October 13th. The stock was sold at an average price of $958.21, for a total value of $1,054,031.00. Following the completion of the sale, the executive vice president owned 3,094 shares in the company, valued at approximately $2,964,701.74. The trade was a 26.23% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.10% of the stock is currently owned by corporate insiders.

Institutional Trading of Costco Wholesale

Several hedge funds have recently made changes to their positions in COST. Contravisory Investment Management Inc. lifted its stake in Costco Wholesale by 107.7% in the third quarter. Contravisory Investment Management Inc. now owns 27 shares of the retailer’s stock valued at $25,000 after buying an additional 14 shares in the last quarter. C M Bidwell & Associates Ltd. bought a new stake in shares of Costco Wholesale during the second quarter worth $28,000. Burk Holdings LLC bought a new stake in shares of Costco Wholesale during the second quarter worth $30,000. Manning & Napier Advisors LLC acquired a new stake in shares of Costco Wholesale during the second quarter worth $30,000. Finally, John Boyer Inc. acquired a new stake in shares of Costco Wholesale during the third quarter worth $32,000. Hedge funds and other institutional investors own 68.48% of the company’s stock.

About Costco Wholesale

Costco Wholesale Corporation operates a membership-based warehouse retail business under the Costco name. The company sells merchandise in bulk and at competitive prices through warehouse clubs and e-commerce platforms, serving individual consumers, businesses and other organizations.

Its product selection includes groceries and fresh foods, household supplies, appliances, electronics, furniture, apparel, health and beauty products, jewelry, automotive products and prescription drugs. Costco also provides services such as optical care, pharmacy services, hearing-aid sales, travel offerings and fuel sales, depending on location.

The company traces its roots to Price Club, which opened in San Diego in 1976.