Retail giant Costco (NASDAQ:COST) is widely known for its ability to offer shoppers virtually anything they could ask for, and plenty of it. Ketchup, napkins, toiletries and more,all by pallet loads; that’s Costco’s marketing style. Now, it’s landed a big new hit selling something that most will never be able to buy in quantity: gold. The impressive sales it’s generated so far—and contributed to recent earnings report—sent Costco shares up over 4% in Friday afternoon’s trading session.
Costco sold better than $100 million worth of gold, one ounce at a time, just in the first quarter alone, reports noted. When Costco actually brings in a load of one-ounce bars, typically PAMP Suisse Lady Fortuna Veriscan bars, they sell out in a matter of hours. That’s particularly impressive when you consider that customers are limited to just two bars per customer, and each bar sells for just over $2,000, though that price depends on gold spot price at the time of purchase. While some look for that gold to lose a bit of its value—one bank was looking for gold to backtrack to $1,900 an ounce—the odds of that gold ever being worthless is minimal.
Selling in Bulk, Opening in Bulk
The notorious bulk retailer is also planning a major expansion. It’s got plans to open 24 new locations in the United States this year, and another seven on top of that worldwide. That basically means a new Costco will open, somewhere in the US, every two weeks for 2024. With a recent earnings report showing that sales are on the rise, and so too are membership fees, it’s clear that customers absolutely want more Costco. Opening more branches, therefore, is the perfect way to take advantage of that desire. And with Costco increasingly offering bargain pricing, particularly in a slumping economy with sky-high inflation, those deals are likely more attractive than ever. Having more places to offer those deals just makes sense.
What is the Stock Price Prediction for Costco in 2024?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COST stock based on 18 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 42.94% rally in its share price over the past year, the average COST price target of $610.96 per share implies 7.42% downside risk.
