TLDR
- Jim Cramer told a Mad Money caller to “buy some here” on Costco, trading around $968, while hoping for a pullback to better value
- Motley Fool Asset Management increased its Costco stake by 20.8% in Q4, adding 10,429 units to reach 60,650 total
- Multiple other funds also raised their positions in Q4 and Q2, with institutional investors collectively owning 68.48% of the stock
- Costco’s last quarter saw revenue beat estimates at $70.53B but EPS missed by one cent at $4.93 vs. $4.94 expected
- Analysts maintain an average “Moderate Buy” rating with an average price target of $1,060.41, well above current levels
Costco (COST) stock opened at $968.59 on Wednesday, down 0.6% on the day, trading well below its 52-week high of $1,096.50.
Costco Wholesale Corporation, COST
On CNBC’s Mad Money, Jim Cramer weighed in when a caller asked about the ideal entry point for a long-term position. His take was straightforward: buy some now, and hope it comes in a little more.
“I want value just like I want value at a store,” Cramer said. He added that the worst case is the stock runs straight to $1,025 and you’re along for the ride.
Cramer noted the stock is trading at 47 times earnings and suggested patience, letting it “come in a little” rather than going all-in at one price level.
Institutions Keep Buying
While retail investors debate entry points, institutional money has been moving in. Motley Fool Asset Management raised its stake by 20.8% in Q4, picking up 10,429 units to bring its total to 60,650, worth around $52.3 million.
It wasn’t alone. Brighton Jones lifted its position by 12.3% in Q4. Revolve Wealth Partners added 13.1%. Several others nudged their holdings higher in Q2 as well. Institutional investors now own 68.48% of the company.
The stock’s 50-day moving average sits at $1,006.30, and its 200-day moving average is $965.46 — meaning the stock is sitting right around its longer-term trend line.
Mixed Earnings, Raised Dividend
Costco reported earnings on May 28th. Revenue came in at $70.53 billion, topping analyst estimates of $70.12 billion. But EPS of $4.93 missed the $4.94 consensus by a single penny.
The company also raised its quarterly dividend from $1.30 to $1.47 per share, paid on May 15th. That puts the annualized dividend at $5.88, for a yield of around 0.6%.
Digital sales jumped over 21% in the quarter, and gasoline volumes hit a record high. Despite those numbers, the stock fell around 5% after the report — a sign investors were focused on valuation rather than the operational story.
Costco also quietly lowered prices on four Kirkland Signature products, covering food, home goods, and sports equipment.
Analysts are largely staying positive. Deutsche Bank lifted its price target to $1,106 with a Buy rating. BTIG Research has a $1,125 target. Evercore and HC Wainwright both maintain Buy ratings as well.
The average analyst price target stands at $1,060.41, with 22 Buy ratings, 11 Holds, and just one Sell.
The stock’s PE ratio sits at 48.72, with a market cap of $429.55 billion. Analysts project full-year EPS of $20.38.
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