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Costco has held its membership fees flat since 2017.
Joe Raedle/Getty Images
Costco Wholesale’s earnings report won rave reviews from Wall Street analysts. An initial fall in its share price suggested investors were disappointed by the lack of a membership fee increase, but that could offer a future catalyst.
Costco
stock (ticker: COST) was up 1.8% in early Wednesday trading at $562.72 after earnings and sales beating consensus forecasts.
That reversed an earlier fall in after-hours and premarket trading when investors appeared to react with disappointment that the retailer hadn’t increased its membership fee.
It might just be a matter of patience, according to analysts.
“With what we continue to view as the highest barriers to entry in all of retail due to its immense buying power and extreme value offering, as well as the potential for an eventual membership fee increase…we remain aggressive buyers of Costco,” wrote Truist analyst Scot Ciccarelli.
Ciccarelli raised his target price on Costco stock to $619 from $597, and kept a Buy rating. The target is based on a multiple of 39 times the company’s expected earnings per share over the next 12 months.
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