Analyst Edward Kelly of Wells Fargo maintained a Hold rating on Costco (COST – Research Report), retaining the price target of $1,000.00.
Edward Kelly has given his Hold rating due to a combination of factors influencing Costco’s current financial performance and market position. Despite Costco’s strong share gains and robust traffic growth, the company’s earnings per share for Q2 fell short of expectations, missing both the consensus and Wells Fargo’s estimates. This shortfall was attributed to modest misses in membership fee growth, a slight decline in core margins, and reduced fuel profitability.
Additionally, while Costco continues to perform well in a challenging retail environment, its valuation appears increasingly stretched. The market’s growing focus on valuation, combined with Costco’s historically high multiples, suggests that the stock may not offer significant upside potential at this time. Therefore, while the company remains fundamentally strong, the current market dynamics warrant a more cautious Hold rating.
Kelly covers the Consumer Defensive sector, focusing on stocks such as Kroger Company, Walmart, and Albertsons Companies. According to TipRanks, Kelly has an average return of 7.9% and a 63.76% success rate on recommended stocks.