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Opinions Stockchase Insights
Costco Wholesale CorporationCOSTBUYMar 08, 2024
Stockchase InsightsStock price when the opinion was issued
As of Jun 16, 2026. Market Open.
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High valuation but is growing double digits, which it should do so for years. They have the lowest prices of products compared to peers. A lot of room to expand location. A great business model. He will hold this forever.
Barry Schwartz
A buy-and-hold forever. Omnichannel retailer, as it's increasingly seeing acceleration in e-commerce and delivery channels.
Brian MaddenHe wrote an in-the-money call at $985. It was trading over $1,000 yesterday down to $950 today. He covered half the position and just closed it out at $5. He netted a $22 profit. Earnings were good, as expected. You can add to it at these levels, despite the high PE.
Kevin Simpson
Both great companies, but both very expensive. COST is over 50x PE, and WMT's in the 40s. Fairly low-margin model. Reliant on the consumer, and everyone's affected when that consumer is struggling.
WMT reported today. Earnings were OK, but projections on future quarters were tough. High fuel prices were highlighted.
No valuation concerns, as it's been expensive every day he's looked at it over 30 years. Compounded shareholder total return of 17.5% since its IPO. Third-largest retailer in the world. Procurement clout and supply-chain efficiencies produce gross margins of 11%. Still expanding store count. Periodically increases membership fees. Superior same-store sales performance driven by traffic and basket size.
Lots of ways to win. Yield is 0.59%.
Brian MaddenThe only consumer staples he owns are COST and KO, which are still growing.
Barry Schwartz
A good name to hold in consumer staples when people panic about market volatility, recession, or the like. Defensive plus steady growth. Runup since January, now trending sideways. Business model is what makes it stand out.
Sees ~11-12% upside from here. Of course, that could change. Ranks 10/10 for her.
Brianne Gardner
EPS of $3.92 beat estimates of $3.62; revenue of $58.44B missed estimates by 1%. Costco's same-store sales growth remains solid as consumers continue to appreciate value. In-store traffic is the main driver, outpacing gains in average transaction size, a trend likely to persist in fiscal 3Q. Strength in food and sundries is a bright spot, though discretionary spending on some big-ticket items is slowly improving. This is helping drive e-commerce revenue gains, which skew to higher-priced items. Improvements to the mobile app and better advertising campaigns are also aiding digital-sales growth. Inflation is moderating in some categories, letting the company lower prices and reinforce its value proposition, helping to drive robust membership-renewal rates. Merchandise gross margin may slightly expand in 3Q on lower supply-chain related costs. The stock dropped on concern on lower margins, and lack of near-term catalysts, but a planned membership price hike (being considered) may change this. But nothing in the release gives us any real concern, though the stock does remain premium priced.
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