Consumer Discretionary

Costco Wholesale (COST) is showing positive momentum across all metrics, BofA Securities said in a report emailed Monday. Costco’s fiscal Q2 adjusted earnings, excluding tax benefits, stood at $3.71 per share, ahead of estimates. The company’s overall comparable sales grew by 5.8%, propelled by a 5.3% rise in foot traffic. BofA said. “While investors had likely hoped for a membership fee increase, we believe current trends support continued strong [membership fee income] growth,” it added. The company’s membership fee income and trends are growing positively, with a 7.8% year over year increase in total member households, a rise in executive member penetration to 46.2% and an uptick in renewal rates to 92.9% in fiscal Q2, the report said. BofA expects strong member engagement from strategic initiatives including digital advertising and enhancements and adjusted the company’s fiscal 2024 EPS to $16.02 from $15.90 and fiscal 2025 EPS to $18.25 from $17.90.

By Sabrina Escobar Costco Wholesale stock was on track for its second straight day of losses Monday following backlash from a lackluster fiscal second-quarter earnings report. Take advantage of the dip, some analysts said, but be wary of the stock’s valuation. Shares of Costco were falling 1.6% to $713.83 on Monday after closing around 7% lower Friday in the stock’s worst trading day in nearly two years. The past two trading days essentially have erased the stock’s nearly 9% gain over the past month. At the heart of the pullback was Costco’s slight revenue miss for the holiday quarter, which ended in mid-February. As Barrons’ Andrew Bary noted this weekend, a quarterly sales increase of 6% was hardly enough to justify the stock’s lofty valuation. Before Thursday’s earnings report, Costco traded at a record 48 times forward earnings. On Monday, Costco’s price-to-earnings ratio had ticked down to 43.6 — but

Telsey Advisory Group analyst Joseph Feldman maintains Costco Wholesale (NASDAQ:COST) with a Outperform and raises the price target from $785 to $800.

Costco Wholesale (COST) shares dropped 4.6% in premarket activity Friday after the company’s fiscal Q2 results showed the increase in net sales lagged market expectations. The company reported fiscal Q2 earnings late Thursday of $3.92 per diluted share, up from $3.30 a year earlier. Analysts polled by Capital IQ expected $3.61. Net sales for the quarter were $58.44 billion, up from $55.27 billion a year earlier. Analysts surveyed by Capital IQ expected $59.13 billion.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We keep our 12-month target at $770, 44.5x our FY 25 (Aug.) EPS of $17.32 (cut from $17.45; FY 24 up to $16.04 from $15.93) vs. 37x five-year average forward P/E. F2Q EPS of $3.92 (+19% Y/Y) beat by $0.31, although there were a few below-the-line benefits related to the $6.7B special cash dividend (e.g., favorable tax rate; elevated interest income due to a higher cash balance). Comp sales (ex-fuel/FX) grew 5.8% Y/Y, a sequential acceleration from F1Q (+3.9%). Membership income grew 8% Y/Y. COST is seeing strength in some bigger-ticket discretionary categories (e.g., appliances, tires), a stark contrast to most other retailers, as COST is lowering prices on merchandise where commodity or freight costs have come down. Digital sales were up a solid 16%, with Costco