Key Takeaways
- Evercore ISI maintained its Outperform stance with an $1,100 price objective following Costco’s June sales figures
- U.S. core comparable sales climbed 7.6%, while worldwide figures reached 7.0%, both stripping out gasoline and currency impacts
- Goldman Sachs preserved its Buy recommendation at $1,159; J.P. Morgan kept its Buy rating at $1,100
- Customer traffic in the U.S. increased 3.2%, marking the seventh consecutive month with two-year trends exceeding 6%
- Analysts anticipate more challenging year-over-year benchmarks through July and August, with traffic comparisons becoming 100–150 basis points more difficult
Costco (COST) stock continues to receive favorable treatment from Wall Street following the warehouse retailer’s June sales disclosure, as several prominent analysts opted to maintain their existing assessments and price objectives.
Costco Wholesale Corporation, COST
Evercore ISI confirmed its Outperform designation while preserving its $1,100 price objective. The investment firm emphasized Costco’s core comparable sales advancement of 7.6% domestically and 7.0% on a worldwide basis, with both metrics excluding gasoline sales and foreign currency fluctuations.
COST was hovering in the $1,050–$1,060 territory when these ratings were issued, suggesting the Evercore objective represents moderate appreciation potential from present levels. According to InvestingPro analytics, the shares appear overvalued compared to Fair Value calculations.
Domestic foot traffic advanced 3.2% during June. This performance sustained the two-year cumulative traffic comparison above 6% for the seventh month running, a pattern that market observers have been monitoring attentively.
Fuel revenues contributed positively to the overall picture. They expanded in the low-30% range on a year-over-year basis, propelled by a 22% surge in average retail price and high-single-digit volume increases in gallons dispensed.
U.S. average transaction size growth, excluding fuel, registered at 4.3%. Evercore’s analysis attributed approximately 1–2% to inflationary pressures, with the balance stemming from increased units per transaction and favorable product mix.
Overseas Performance Shows Deceleration
Beyond domestic borders, performance indicators showed some softening. Canadian core comparables landed at 4.9%, representing a 120-basis-point decline from the preceding three-month average. Additional international territories recorded 5.6%, likewise down 110 basis points from recent momentum.
June’s aggregate comparable sales expansion reached 8.8%, although core comparables of 7.0% signaled a deceleration from May’s 8.7% figure.
Goldman Sachs analyst Kate McShane preserved a Buy recommendation with an $1,159 price objective. McShane observed that while June figures landed marginally beneath consensus projections, the shortfall was partially attributable to cannibalization effects from recently opened warehouse locations rather than any fundamental demand weakness.
McShane additionally emphasized that management observes no significant shifts in shopper behavior or the competitive landscape. Membership momentum and traffic patterns remain healthy.
J.P. Morgan aligned with this perspective, likewise preserving a Buy recommendation with an $1,100 price objective.
Baird sustained its Outperform assessment at $1,100. Gordon Haskett reaffirmed Buy while elevating its target to $1,200, characterizing June’s 7.0% same-warehouse sales growth as marginally below projections but nonetheless robust.
More Difficult Benchmarks on the Horizon
Not all observers shared the same enthusiasm. DA Davidson and Citi both maintained Neutral positions, with objectives of $1,000 and $1,020 respectively. Both highlighted the slowdown in sales momentum from May to June.
Telsey confirmed Outperform at $1,135 but acknowledged June underperformed its 10.6% forecast.
Evercore cautioned that comparisons will intensify throughout the summer months. Traffic benchmarks become 100 basis points more challenging in July and 150 basis points tougher domestically.
Costco’s aggregate revenue expansion over the trailing twelve months registers at 9.23%, underpinning a market capitalization of $422.69 billion.
Goldman’s McShane also referenced Costco’s trials with standalone fuel stations as a development meriting attention, characterizing it as evidence of the company’s strategic orientation toward long-term member service enhancement.
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