Key Takeaways - Oppenheimer analysts maintained an "outperform" rating on Costco Wholesale (COST) following strong December sales performance, citing potential catalysts such as a stock split [1][3] - Costco's adjusted U.S. comparable sales increased nearly 10% year-over-year in December, reinforcing its position as a top pick for analysts [2] - The analysts set a price target of $1,075 per share for Costco, above the consensus estimate of $1,047 from Visible Alpha [2] - Costco's combination of gold bars and a strong gift card assortment continues to resonate with consumers [2] - Costco shares have risen nearly 40% over the past year, closing at $927.37 on Wednesday [2][3] Stock Performance and Catalysts - Costco shares closed at $927.37 on Wednesday, reflecting a 41% increase over the past year [3] - A potential stock split is highlighted as a catalyst for Costco's shares, as high share prices often lead to splits to make them more accessible to retail investors [1][3] Sales and Consumer Appeal - Costco's December sales growth of nearly 10% year-over-year underscores its strong performance in the U.S. market [2] - The company's product offerings, including gold bars and gift cards, continue to attract consumer interest [2]

Sales Performance - Costco reported net sales of $27.52 billion in the five-week period through Jan 5, a 10% year-over-year increase [1] - US comparable sales improved more than 9% year-over-year [1] - E-commerce sales surged 34% year-over-year, with an estimated 15 percentage point boost from the later timing of Thanksgiving/Black Friday/Cyber Monday [1] Analyst Commentary - JPMorgan analysts reiterated an "overweight" rating but lowered price target to $1,065 from $1,090 [1] - Visible Alpha analyst consensus price target is $1,047.06 [1] - Citi analysts expect "modest strength" in Costco stock following December results, maintaining a "neutral" rating and $1,060 price target [2][3] Market Context - Costco shares closed at $927.37 on Wednesday, representing a roughly 15% discount to JPMorgan's price target [1] - Shares have fallen 7% since hitting an all-time closing high of $994.69 on Dec 11 [2] - Results indicate improving consumer spending, particularly among upper-middle class and higher-income consumers [2]

Costco's Sales Performance - Costco's comparable sales in the US, excluding gasoline prices and foreign exchange rates, increased by 9.8% in December, while Canada and Other International markets saw gains of 10.3% and 9.8%, respectively [1] - Total comparable sales, excluding external factors, rose by 9.9% [1] - For the five weeks ended Jan 5, comparable sales in the US grew by 9.3%, with Canada and Other International markets increasing by 4.3% and 1%, respectively [7] - Total company comparable sales for December rose by 7.4%, following consecutive increases of 3.1% and 5.1% in November and October [7] - Costco's e-commerce comparable sales surged by 34.4%, or 35.7% when adjusted for gasoline prices and foreign exchange fluctuations [8] - E-commerce sales were positively impacted by approximately 15 percentage points due to the timing of Thanksgiving, Black Friday, and Cyber Monday [8] - Net sales for December increased by 9.9%, reaching $27.52 billion, up from $25.03 billion in the same period last year [9] Costco's Business Model and Market Position - Costco's membership-based structure and high renewal rates are key growth drivers, ensuring customer loyalty and competitive pricing [10] - The company's efficient supply chain management and bulk purchasing power contribute to its operational excellence [10] - Shares of Costco have advanced by 37.8% in the past year, outperforming the Retail – Discount Stores industry's rise of 21.9% [10] Investment Opportunities in Related Companies - Freshpet Inc (FRPT) has a trailing four-quarter earnings surprise of 144.5% on average, with current financial-year sales and earnings expected to grow by 27.2% and 228.6%, respectively [3] - United Natural Foods (UNFI) has a trailing four-quarter earnings surprise of 553.1% on average, with current financial-year sales and earnings projected to grow by 0.3% and 442.9%, respectively [4] - Sprouts Farmers (SFM) has a trailing four-quarter earnings surprise of 15.3% on average, with current financial-year sales and earnings expected to grow by 12.2% and 29.6%, respectively [5]

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Sales Performance - Costco reported a 9.8% growth in December U.S. core sales, surpassing Wall Street's 5.2% estimate and JPMorgan's 6.7% forecast [1] - E-commerce sales surged 35.7% year-over-year, partly due to Black Friday sales booked in December because of a holiday calendar shift [1] - International operations showed strong performance with core comps climbing 10.3% in Canada and 9.8% across other regions [2] Consumer Trends - The shorter holiday season contributed to December's strong sales numbers [2] - Higher-income shoppers are driving improved consumer spending, particularly among the upper-middle class and higher-income segments [2][3] - Costco's ability to attract these high-income consumers is a key factor in its success [3] Product Categories - Fresh foods like meat and produce saw high single-digit growth [3] - Non-food categories, including jewelry, toys, and gift cards, experienced growth in the high teens [3] - Ancillary services such as pharmacy and optical rebounded, benefiting from a holiday lift [4] - Electronics, including TVs, showed sequential improvement [4] Future Outlook - JPMorgan analyst Christopher Horvers maintains an Overweight rating on Costco's stock with a price target of $1,065 [5] - Costco's unique ability to grow across its stores and geographies, along with its emerging advertising revenue stream, positions it as a standout in the retail industry [5] - The company's momentum is described as unstoppable, with growth rates unmatched by other scaled retailers except for Amazon [6] Global Consistency - Costco's success in every country it has entered is highlighted as unmatched by any other major retailer [2]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Inflation Trends - Inflation has steadily cooled over the past two years, with a slight stall in October and November [1] - Prices for gasoline, used cars, and energy have declined accordingly [1] - Food prices have increased by 28% since 2019, outpacing overall inflation [1] Consumer Behavior - More than 85% of consumers report frustration with rising grocery prices [1] - Over a third of consumers have resorted to buying fewer items to save money [1] Expert Opinions on Food Prices - High food prices are expected to persist, as food prices tend to stay elevated once they rise [2] - Experts are skeptical about the effectiveness of policy interventions in reducing food prices [2] - The current political climate introduces uncertainties, making it challenging to predict future food price trends [3] Impact of Tariffs and Workforce Changes - Tariffs are expected to significantly increase food prices [4] - Mass deportations could harm the workforce that supports the food system, negatively impacting the economy [4]

When consumers look for value, a trip to Costco Wholesale Corp. NASDAQ: COST is frequently on the agenda. But as investors have been looking for value in December, COST stock has fallen out of favor. Shares of Costco stock are down about 2.2% for the month as of December 27. However, the stock is down over 6% after hitting a high of around $1,007 prior to the company’s earnings on December 12.  Trading at over 52x forward earnings and with a return on equity of around 33%, investors may be correct in thinki ...

Costco Wholesale (COST 0.94%) has become a phenomenon. Its differentiated warehouse retail model is incredibly reliable, and Costco consistently enjoys strong growth. Beyond that, it has several growth drivers that make it even more compelling as a stock with massive potential.However, like anything in life, Costco isn't perfect. If you're considering buying Costco stock today, there's one major risk you need to know about as well.Why everyone loves CostcoInvestors and shoppers alike love Costco. It offers ...