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Opinions Stockchase Insights
Costco Wholesale CorporationCOSTBUY ON WEAKNESSMay 29, 2023
Stockchase InsightsStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Premium contentCostco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. Social media mentions are up 267% in the past 24h.
A leader. Dominant position in US. Buy on any day "that ends in 'y'". Always seems expensive if you look at the high 30s PE ratio. Chart looks stretched. Look for a pullback, perhaps when December seasonality subsides early in the new year. Membership rate increases every couple of years creates earnings power, as there are few good substitutes.
About as good as it gets on long-term buy and hold.
Up 44% this year, 4.5% today. Nobody does it better than them in retail. Last night they reported an amazing quarter: 7% increase in cardholders, member fee income up 8.2%, enjoying lower freight costs and will pay a special one-time dividend to shareholders. Plus, they're controlling shoplifting. One to own forever.
Leans towards AMZN, based on it having retail but also AWS. AI investments should help both AWS and retail customers. More compound potential because of different business streams.
COST has been well developed, but not sure how much more juice there is.
Terrific business. He's also been watching and waiting. Always trades at a high multiple, around 30x earnings. Unique business model with memberships, not a traditional retailer. Strong recently, because it's one of the few ways for consumers to save money. Stock weakness might occur if interest rates ease.
EPS of $3.42 beat estimates of $3.28. Sales of $53.6B slightly missed estimates of $54.26B. Costco's top-line growth in fiscal 4Q may be driven more by traffic as the average basket size declines, though same-store sales excluding fuel and foreign exchange face tough comparisons. Food and sundries are categories of strength. Management expects inflation to moderate in 4Q, though lower demand for big-ticket items like furniture and electronics remains a headwind that will persist. The company discontinued its charter shipping activities in 3Q, resulting in a non-recurring charge that's weighing on profit. Core merchandise margin may be pressured in fiscal 4Q from higher costs and lower sales of higher-margin discretionary items. Investors liked the results, and the stock remains one that could still do well in a recessionary environment. Valuation is certainly up there at 35X earnings, but it has never been a cheap stock.
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