Costco’s elevated costs to continue normalizing, says Loop Capital

Loop Capital keeps a Buy rating and $615 price target on Costco after its Q4 earnings beat. While the company’s EPS upside was due to items below EBIT, inflation is “easing nicely”, the analyst tells investors in a research note. During periods of heightened inflation, Costco takes on much of the elevated costs without passing them on to customers, and this should continue to normalize in FY24, benefiting gross margin, the firm added.