SmarterAnalyst
Costco Q3 Earnings Beat Expectations; Street Says Buy
Membership-only retail chain store operator Costco Wholesale Corporation (COST) reported better-than-expected earnings backed by strong consumer demand. Earnings for the quarter stood at $2.75 per share, an increase of 45.5% year-over-year, and surpassed the Street’s estimates of $2.34 per share. Total revenue came in at $45.28 billion, up 21.4% from the prior-year quarter, and outpaced the Street’s estimates of $43.64 billion. Net sales increased 21.7% to $44.38 billion and membership fees grew 10.6% to $901 million. Comparable sales (excluding impacts of gasoline prices and foreign exchange fluctuations) increased 15.1%, including an E-commerce comp sales rise of 63.6%. (See Costco stock analysis on TipRanks) Following the third-quarter results, Oppenheimer analyst Rupesh Parikh reiterated a Buy rating on the stock with a price target of $425, which implies 9.7% upside potential to current levels. Parikh said, “We look very favorably upon COST’s long-term prospects. A few key factors underpin our views: 1) unique and improving consumer value proposition; 2) open-ended worldwide growth prospects; 3) leading competitive position poised to continue to drive share gains… However, given still difficult upcoming compares, cost pressures, and positive stimulus spending, the setup has gotten even more trickier. As a result, we view COST shares as appropriate for longer-term players.” The Wall Street community has a Strong Buy consensus rating on Costco’s stock. That’s based on 18 Buys and 5 Holds. The average analyst price target of $408.38 implies 5.4% upside potential to current levels. Shares have gained 1.9% year-to-date. Costco scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Related News: Ford Ramps-Up EV Spending To $30B; Shares Jump 8.6% Snowflake Reports Better-than-Expected Q1 Revenue, EPS Miss; Shares Dip Williams-Sonoma Q1 Earnings Smash Estimates and Rise 296%; Shares Pop More recent articles from Smarter Analyst: Nokia Wins Network Security and Upgrade Contract from T-Mobile Burlington Stores Reports Blowout First-Quarter Results; Shares Dip Anaplan Posts Larger-than-Expected Q1 Loss; Shares Plunge 13% Mercury Systems Snaps up Pentek for $65M