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Costco Wholesale will report earnings after the bell Thursday at the opening of its next fiscal year, with analysts expecting rising sales and profits.
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Most of the analysts tracked by Visible Alpha have a buy rating, but the average price target suggests they think Costco stock is near its ceiling.
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The department store chain recently said the late Thanksgiving and Black Friday weekends negatively impacted online sales.
Costco Wholesale (COSTS) is expected to report earnings for the first quarter of fiscal 2025 after the market closes on Thursday, with analysts expecting the retailer to report rising sales and profits.
Of the twenty analysts tracked by Visible Alpha, thirteen have a ‘buy’ rating on the department store chain’s stock, while the other seven have a ‘hold’ rating. However, the average target price of $977.95 suggests a more cautious outlook, with shares trading about 1% above the target price on Monday.
Analysts expect Costco to report a roughly 7% increase in sales to $62.1 billion, compared to $57.8 billion at the same time last year, according to Visible Alpha estimates. Net income is also expected to rise to $1.7 billion, or $3.81 per share, compared to $1.6 billion and $3.58 per share at the same time last year.
This quarter is the first since Costco raised its membership fees in September, which takes effect at the start of the fiscal year. However, company executives said last quarter that the impact would likely be weighted to the second half of the 2025 fiscal year.
JPMorgan analysts, who raised their price target to $1,090 from $945, recently wrote that Costco has historically invested quickly in things like higher wages and lower prices, minimizing the immediate impact of the increase.
In reporting November sales last week, Costco said Thanksgiving and Black Friday happening a week later than last year negatively impacted sales, especially online. However, analysts remained optimistic following the monthly data, as JPM analysts said Costco’s “core trends” are “ahead of expectations and quite robust,” while Oppenheimer analysts floated the idea of ​​a future stock split as a potential “positive catalyst” for Costco stock.
Costco shares were down about 1% on Monday but are up nearly 50% since the start of 2024.
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