Is Costco a blue-chip stock?
Costco Wholesale (NASDAQ:COST) stock continues to be one of the best blue-chip stocks investors can buy and remains the gold standard of the retail sector.
Costco Wholesale Corporation's (“Costco”) shareholder services and transfer agent, Computershare, offers the Investor Services Program for investors wishing to purchase or sell Costco common stock.
Costco (NASDAQ: COST) has a habit of proving the skeptics wrong. Having started 2024 at a premium price compared to its rivals, the warehouse retailer has gone on to outperform peers again while touching new highs. Shares are up a blazing 45% in the past 12 months compared to Walmart's 20% gain.
Costco could be a good long-term buy -- but at its current multiple, investors are paying for a lot of future earnings growth. If you want to hang on to it for decades, then it could still be a good investment for you.
Key Points. Stock valuations can be subjective, but shares of Costco appear to be objectively overvalued. The retail giant has a great business model that has delighted both customers and shareholders. But BJ's Wholesale Club offers investors the same model -- and at a more reasonable valuation.
The downside is that Costco's profit margin tends to remain low, at about 3% of sales, even during boom times. Investors also might be disappointed with the chain's cash returns in the coming years.
Investors should understand Costco's business model before investing in the company's stock because it is a very real risk given current trends.
| Average Recommendation | Overweight |
|---|---|
| Average Target Price | 776.54 |
| Number Of Ratings | 38 |
| FY Report Date | 8/2024 |
| Last Quarter's Earnings | 3.71 |
Historical daily share price chart and data for Costco since 1986 adjusted for splits and dividends. The latest closing stock price for Costco as of April 24, 2024 is 723.89. The all-time high Costco stock closing price was 785.59 on March 07, 2024.
Of course, Costco is going to have a much larger number of stores in the future. In the last 10 years, the store count expanded at a compound annual rate of 3%. Management opened 23 net new locations in fiscal 2023, with plans to open 31 in the current fiscal year.
Is Costco a safe stock to buy?
Key Points. Costco shares have more than tripled in the past five years. Because of that strong performance, the stock trades at a steep P/E ratio of 49. This is no doubt a superb business, but it's not a smart buy right now.
But I believe that Costco's P/E ratio could actually contract because of how expensive it is right now, and this creates downside risk for investors. Don't expect the $1,000 mark to be met in 2024. And for investors who are drawn to the business, it's best to practice patience and wait for a better valuation.
The top individual insider shareholders of Costco are Craig Jelinek, Charles Munger, and Patrick Callans, and the top institutional shareholders are Vanguard Group Inc., BlackRock Inc., and State Street Corp.
Costco Wholesale topped earnings expectations, but the stock fell following the company's rare revenue miss. The company's fiscal second-quarter revenue of $58.4 billion missed analyst projections for $59.1 billion.
While Costco appears to have the best growth prospects, that isn't enough to make it the best investment. Walmart trades at a lower valuation, and its higher dividend yield means you will receive more in dividend payments than you would on the same amount of money invested in Costco. That makes Walmart the winner.
Costco's strong stock performance is driven by its consistent earnings growth. With a loyal customer base, Costco is the type of company that makes money in any economy.
The highest analyst price target is $905.00 ,the lowest forecast is $601.00. The average price target represents 8.88% Increase from the current price of $713.72. Costco's analyst rating consensus is a Strong Buy. This is based on the ratings of 26 Wall Streets Analysts.
Furthermore, the earnings per share (EPS) estimates for the fiscal year indicate a stable financial outlook for Costco, yet the projected earnings growth may already be priced into the market.
Total debt on the balance sheet as of February 2024 : $9.43 B. According to Costco's latest financial reports the company's total debt is $9.43 B. A company's total debt is the sum of all current and non-current debts.
Costco stock is always expensive
Costco's dividend yield is tiny at 0.5%, largely thanks to its long history of successful growth. Value investors and those trying to maximize the income they generate probably won't find it attractive.
How much will Costco stock be worth in 10 years?
According to the latest long-term forecast, Costco price will hit $800 by the end of 2024 and then $900 by the middle of 2025. Costco will rise to $1000 within the year of 2026, $1100 in 2027, $1300 in 2028, $1500 in 2029, $1600 in 2030, $1700 in 2032, $1800 in 2033 and $2000 in 2035.
Costco Wholesale Corp quote is equal to 722.335 USD at 2024-04-24. Based on our forecasts, a long-term increase is expected, the "COST" stock price prognosis for 2029-04-18 is 1112.158 USD. With a 5-year investment, the revenue is expected to be around +53.97%. Your current $100 investment may be up to $153.97 in 2029.
There's no doubt that Costco has been incredibly successful from a financial perspective. And this has resulted in the stock rising almost sixfold in the last decade. As a result, the company carries a market cap of $308 billion today. Furthermore, Costco is the world's third-biggest retailer in terms of net sales.
Costco long term debt for 2021 was $6.692B, a 10.94% decline from 2020.
Some of the highest wages a worker can make at Costco are in the job titles Registered Pharmacist ($136,000), and title Full Stack Software Engineer ($133,750) which are the highest paying jobs at Costco.
