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Here’s How Analysts Reacted to Costco’s Q2 Results

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Mar. 8 2019, Published 8:11 a.m. ET

Analysts raised target price

Costco (COST) impressed investors with its second-quarter comps and earnings growth rate. After the company released results, analysts raised their target price. RBC raised its target price on Costco stock to $250 per share from $235. Meanwhile, J.P. Morgan increased it to $248 from $240. Moreover, Oppenheimer raised its target price to $245 from $240.

Costco continues to report industry-leading comps growth. Meanwhile, its EPS have grown at a stellar double-digit rate in the past several quarters. Analysts expect Costco’s sales and earnings growth rate to decelerate slightly in the coming quarters as the company faces tough YoY comps. However, Costco is likely to outperform Target (TGT) and Walmart (WMT) with its comps growth rate. Meanwhile, its EPS are projected to mark high-single-digit growth, which is impressive given the continued investment in price and tough comparables.

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Rating and target price

Among the analysts covering Costco stock, 16 analysts suggest a “buy,” and 11 analysts have a “hold” recommendation. Analysts have a target price of $239.65 per share, which implies an upside of $216.79. In comparison, analysts have a neutral recommendation on Walmart and Target, as margin pressure and increased competition are expected to remain a drag on their earnings growth rates.

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