Copeland Capital Management LLC has reduced its stake in Costco Wholesale Corporation (NASDAQ:COST) by 24.7% during the third quarter of 2023, according to a recent filing with the Securities and Exchange Commission. The institutional investor held 12,038 shares at the end of the reporting period, following the sale of 3,940 shares. The remaining shares were valued at approximately $11.1 million.
Other institutional investors have also adjusted their positions in Costco. Notably, Bulwark Capital Corp acquired a new stake worth $25,000 during the second quarter. Soundwatch Capital LLC significantly increased its holding by 635.7%, bringing its total to 2,553 shares valued at $25,000. Similarly, LFA Lugano Financial Advisors SA purchased a new stake valued at about $31,000, while Anderson Financial Strategies LLC grew its stake by 900.0% in the first quarter. Finally, Financial Connections Group Inc. raised its holdings by 975.0% during the second quarter, now owning 43 shares worth $42,000. Currently, institutional investors own 68.48% of Costco’s stock.
Research analysts have been closely monitoring Costco’s performance. In a report dated December 12, 2023, Robert W. Baird reduced its price target for Costco shares from $1,125.00 to $1,000.00, maintaining an “outperform” rating. Likewise, HSBC lowered its target from $1,060.00 to $1,045.00, labeling it as a “hold.” Other analysts, including Citigroup and Daiwa Capital Markets, have also adjusted their price targets downward, reflecting cautious sentiment regarding the stock’s near-term prospects. Overall, nineteen analysts rated Costco as a “buy,” while thirteen rated it as a “hold,” and one issued a “sell.” According to data from MarketBeat, the average rating for Costco is currently “Moderate Buy,” with an average target price of $992.08.
In market activity, Costco shares opened at $865.65 on Wednesday, reflecting a slight decline of 0.3%. The company has experienced a fifty-two week low of $844.06 and a high of $1,078.23. Its fifty-day moving average stands at $899.58, while the two-hundred-day moving average is $936.84. With a market capitalization of $384.24 billion, Costco’s price-to-earnings ratio is 46.37, with a P/E/G ratio of 5.20 and a beta of 1.00.
Costco recently announced its earnings results for the quarter ending December 11, 2023. The retailer reported earnings per share of $4.34, surpassing analysts’ expectations of $4.27 by $0.07. The company’s return on equity was 29.35%, and it achieved a net margin of 2.96%. Costco’s revenue for the quarter reached $67.31 billion, exceeding the anticipated $67.03 billion. This represents an increase of 8.3% compared to the same quarter the previous year.
The retailer also declared a quarterly dividend of $1.30 per share, which was paid on November 14, 2023. Shareholders of record as of October 31, 2023, received this dividend, amounting to an annualized dividend of $5.20 and a yield of 0.6%. The company’s dividend payout ratio is currently 27.85%.
Recent news surrounding Costco highlights various sentiments affecting the company’s outlook. Positive reports from Zacks indicate strong traffic gains and increased digital engagement, supporting Costco’s value-driven model and sustainable revenue growth. Additionally, Northcoast notes that Costco’s global expansion is gaining momentum, which could enhance long-term store-level sales and membership growth outside the United States.
Conversely, negative reports indicate competitive pressures, particularly from Sam’s Club, which is gaining traction in China. This poses risks to Costco’s international growth and profit margins in that market. Analysts express frustration over the disconnect between operational performance and stock price support, despite improvements in cash flow and margins.
In insider trading, Tiffany Marie Barbre, a company insider, sold 1,239 shares on October 24, 2023, at an average price of $934.62, totaling approximately $1.16 million. Following this transaction, she holds 5,155 shares valued at around $4.82 million. Additionally, Claudine Adamo, Executive Vice President, sold 2,700 shares on the same day for about $2.53 million, reducing her ownership by 28.27%.
Costco Wholesale Corporation operates a global chain of membership-only warehouse clubs, offering a diverse array of products, including groceries, electronics, and household goods, at discounted prices. The company relies heavily on annual membership fees and high-volume sales to foster customer loyalty. Beyond its product offerings, Costco provides various ancillary services, such as gasoline stations and pharmacy services, enhancing the overall shopping experience.
