Key Takeaways
- Evercore ISI maintained its Outperform stance with a $1,100 price objective following Costco’s June sales performance
- Domestic core comparable sales climbed 7.6%, with worldwide figures reaching 7.0%, both stripping out gasoline and currency impacts
- Goldman Sachs kept its Buy recommendation at a $1,159 price objective; J.P. Morgan sustained Buy at $1,100
- Domestic foot traffic increased 3.2%, maintaining a two-year combined trend above 6% for the seventh consecutive month
- July and August face more challenging year-over-year benchmarks, with traffic comparisons becoming 100–150 basis points more difficult
Costco (COST) stock continues to receive favorable analyst coverage following the warehouse retailer’s June sales disclosure, with several Wall Street firms maintaining their bullish positions despite mixed signals.
Costco Wholesale Corporation, COST
Evercore ISI reaffirmed its Outperform assessment while maintaining the $1,100 price objective. The investment bank highlighted Costco’s core comparable sales expansion of 7.6% domestically and 7.0% worldwide, with both metrics excluding petroleum products and currency fluctuations.
COST was changing hands near the $1,050–$1,060 zone when these assessments were issued, suggesting the Evercore projection represents limited upside potential from prevailing prices. InvestingPro analysis indicates the shares trade above their calculated Fair Value threshold.
Domestic foot traffic advanced 3.2% during June. This performance extended the two-year combined traffic comparison above the 6% threshold for a seventh straight month, a pattern that market watchers have been monitoring with interest.
Petroleum sales contributed positively to the overall picture. They surged in the low-30% range on a year-over-year basis, propelled by a 22% increase in average retail price and high-single-digit volume expansion in gallons dispensed.
Domestic ticket expansion excluding petroleum reached 4.3%. Evercore estimated that approximately 1–2% stemmed from inflationary pressures, with the balance attributable to increased units per transaction and product category mix.
Overseas Markets Show Deceleration
Beyond U.S. borders, performance proved somewhat weaker. Canadian core comparables registered 4.9%, representing a 120-basis-point decline from the preceding three-month average. Additional international territories delivered 5.6%, likewise down 110 basis points from recent momentum.
June’s aggregate comparable sales expansion reached 8.8%, though core comparables of 7.0% marked a deceleration from May’s 8.7% figure.
Goldman Sachs equity analyst Kate McShane sustained a Buy recommendation with a $1,159 price objective. McShane observed that while June performance trailed consensus projections marginally, the shortfall was partially attributable to cannibalization effects from recently opened locations rather than any fundamental demand weakness.
McShane further emphasized that company leadership perceives no significant shifts in shopper behavior or the competitive landscape. Membership momentum and store traffic patterns remain healthy.
J.P. Morgan aligned with this perspective, likewise sustaining a Buy recommendation with a $1,100 price objective.
Baird preserved its Outperform assessment at $1,100. Gordon Haskett reaffirmed Buy while elevating its target to $1,200, characterizing June’s 7.0% same-store sales expansion as marginally below expectations but nonetheless robust.
More Difficult Benchmarks on Horizon
Not all observers shared this enthusiasm. DA Davidson and Citi both retained Neutral assessments, with objectives of $1,000 and $1,020 respectively. Both organizations cited the slowdown in sales momentum from May through June.
Telsey confirmed Outperform at $1,135 but acknowledged June underperformed its 10.6% forecast.
Evercore cautioned that benchmarks will intensify throughout the summer period. Traffic comparisons become 100 basis points more challenging in July and 150 basis points more demanding domestically in August.
Costco’s aggregate revenue expansion over the trailing twelve-month period stands at 9.23%, underpinning a market capitalization of $422.69 billion.
Goldman’s McShane additionally referenced Costco’s trials with standalone petroleum stations as a development meriting attention, characterizing it as evidence of the organization’s strategic orientation toward long-term member satisfaction.
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