Big box retailer, Costco Wholesale Corporation (NASDAQ:COST) received a new Street high price target from Tigress Financial Partners analyst Ivan Feinseth. The five-star analyst maintained a Buy rating and increased the price target to $975 from $870. The new price target implies 14.6% upside potential from current levels for this consumer stock.
Costco operates a membership-only chain of warehouse clubs through physical warehouses and an e-commerce portal. In the past year, COST stock has gained over 64%. Excluding the seasonality factor, Costco has consistently increased its revenues and profit margins by following a disciplined expense management approach.
Feinseth’s Thesis for the Revised Price Target
Feinseth expects Costco to witness solid revenue momentum based on several growth catalysts. Some of the factors that impress Feinseth are its unique shopping model (like a treasure hunt), growing international footprint, higher store openings, and efficient supply chain management.
The analyst also highlighted the company’s ability to create continued shareholder value through dividends and stock buybacks. Costco currently pays a regular dividend of $1.16 per share, reflecting an above-industry yield of 2.24%. As of May 12, 2024, Costco had $3,079 worth of share buybacks available under its current share repurchase plan.
The analyst noted that Costco’s Fiscal Q3 revenues were boosted by overall growth in comp sales across North American and International markets. Meanwhile, easy delivery options and strong demand for consumer discretionary items helped sustain its revenue growth.
Moreover, Costco’s focus on developing its Kirkland Signature branded products at prices lower than the national brands bodes well for the retailer. The analyst believes that the retailer’s growing membership base is a symbol of its business strength as the wholesaler strives to offer high quality at lower prices.
Feinseth’s Ranking on TipRanks
Ivan Feinseth ranks 194 among more than 8,900 analysts on TipRanks. With a success rate of 61%, Feinseth has achieved an impressive average return per rating of 13.10%.
Is Costco Stock a Buy?
Along with Feinseth, seven other analysts have lifted their price targets on Costco stock this month. On TipRanks, COST has a Strong Buy consensus rating based on 20 Buys and six Hold ratings. The average Costco Wholesale Corporation price target of $860.58 implies 1.2% upside potential from current levels.
Ending Thoughts
Ivan Feinseth’s belief in Costco stock is based on the retailer’s unique business model and value proposition. The analyst believes that Costco is poised for solid revenue growth in the long term, driven by membership growth and its value offerings.
