On the surface, it’s pretty easy to defend Costco (NASDAQ:COST). In good times, it becomes a stock-up operation whose convenience is unparalleled. In bad times, it becomes a stock-up operation that provides vital peace of mind to consumers who may be about to lose a job. And that’s likely why it’s up over 2% in Wednesday afternoon’s trading despite remaining silent about membership numbers.
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Costco started the day down a bit but recovered over the course of the day. It was a good news/bad news scenario that led the way as Costco rolled out its earnings report. While Costco did put up a winner of an earnings report featuring beats on revenue and earnings, it wasn’t all sunshine and smiles. The fact that Costco posted nearly 10% better revenue than it did in the fourth quarter of 2022 was an achievement. Several analysts stuck to their bullish recommendations.
Yet, investors and analysts alike were somewhat unsettled by the fact that Costco didn’t talk much about its membership numbers. There were also growing concerns about wages, which have been rapidly inflating mostly because everything else is, and businesses need to keep their employees around so that the work actually gets done. Worse, there’s little sign of relief in those wage numbers, either; the labor market is still fairly tight, and inflation is still a runaway nightmare.
What is the Fair Value of Costco Stock?
Most analysts are staying firm on Costco, however. Costco stock is considered a consensus Strong Buy, owing to 18 Buy recommendations and five Holds. Meanwhile, Costco stock also offers a modest 5.39% upside potential thanks to its average price target of $594.71.
