Costco Wholesale Corporation, based in Issaquah, Washington COST has a market capitalization of $379 billion and is a leading retailer in the membership-based warehouse sector. The company offers a wide range of products and services, including groceries, electronics and gasoline, through its extensive network of physical stores and e-commerce platforms.

Shares of the warehouse club giant have significantly outperformed the broader market over the past 52 weeks. COST has gained 52.8% during that time, while the broader S&P 500 Index ($SPX) has gained 19.6%. In 2024, shares of COST are expected to rise 29.5%, compared to SPX’s annualized gain of 12%.

On closer inspection, COST also outperforms the Vaneck Retail ETFs RTH 10.8% increase over the last 52 weeks and 5.6% year-on-year.

Costco Wholesale outperformed last year thanks to robust sales growth and significant gains in e-commerce, supported by a strong member base and high renewal rates. The company’s strategic expansion and competitive pricing on new products like gold and silver further strengthened its performance.

In addition, the stock rose more than 1% on May 30 as third-quarter sales came in better than expected due to increased consumer demand for low-cost consumer goods and groceries. However, it declined slightly the next day as investors believed the stock’s strong performance was already factored into the share price, so there were no surprises or further upside following the earnings release.

For the current fiscal year ending in August, analysts expect COST’s earnings per share to rise 8.8% year over year to $15.98. The company’s past earnings surprises are encouraging, with it beating consensus estimates for the last four quarters.

The 29 analysts covering the stock have a consensus rating of “Strong Buy” on the stock, based on 19 “Strong Buy” ratings, three “Moderate Buy” ratings and seven “Hold” ratings.

This configuration has remained unchanged over the last month.

On August 8, Jefferies analyst Corey Tarlowe maintained his Buy rating on Costco with a price target of $1,050 – the highest price target – citing solid performance metrics including a 7.2% increase in comparable sales and strong growth in the transportation and non-food categories, implying a potential upside of 22.8% from current levels.

The average price target of USD 879.38 represents a premium of just 2.9% to COST’s current level.

As of the date of publication, Sohini Mondal had no position (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see Barchart’s disclosure policy here.