Shares of the Issaquah, Wash., company recently traded at $376.40, down 1.9%. But the stock has climbed 28% year to date amid strong consumer demand during the coronavirus pandemic.
Deutsche Bank analysts have a hold rating on the stock, with a $328 price target.
“Costco reported strong November sales, albeit softer than the prior two months, with core same-store sales up 14.6% vs. a Deutsche Bank [expectation] of 15.1% and compared to 16.5% in October, … as hardlines decelerated to mid-teens growth,” they wrote in a commentary.
Oppenheimer analysts have an outperform rating on Costco, with a $400 price target.
“The softer growth appears to be driven by the consumer electronics category, which has experienced very robust growth since May,” they wrote in a commentary.
“As a result, we believe the slowdown could have been impacted by a pull-forward in demand. U.S. traffic remained robust, increasing 8.4%. [Given that the shares are] trading essentially consistent with all-time highs, we would expect some weakness [Thursday]. Costco remains a top pick for us.”
J.P. Morgan analysts have an overweight rating on Costco, with a $406 price target.
“Despite strong stock-up behavior, we believe there was some moderation in the comparison trend late in the month on a softer Black Friday weekend year-on-year, due to social distancing and an October/early November pull-forward in holiday demand starting with Prime Day from November.”
Still, “we believe Costco continues to be a core holding,” the analysts said.