J.P. Morgan Thinks Costco’s Stock is Going to Recover

By Ryan Adsit

J.P. Morgan analyst Christopher Horvers reiterated a Buy rating on Costco (NASDAQ: COST) today and set a price target of $171. The company’s shares opened today at $143, close to its 52-week low of $138.57.

According to TipRanks.com, Horvers is a 4-star analyst with an average return of 5.7% and a 58.7% success rate. Horvers covers the Services sector, focusing on stocks such as Dick’s Sporting Goods, Genuine Parts Company, and Container Store Group.

Currently, the analyst consensus on Costco is Strong Buy and the average price target is $171.13, representing a 19.7% upside.

In a report issued on October 20, BMO Capital also reiterated a Buy rating on the stock with a $180 price target.

Based on Costco’s latest earnings report from February 29, the company posted quarterly revenue of $28.17B and quarterly net profit of $546M. In comparison, last year the company earned revenue of $35.78B and had a net profit of $767M.

Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is negative on the stock. Last month, David Petterson, an Insider at COST sold 3,000 shares for a total of $453,270.

Costco Wholesale Corp. operates membership warehouses based on the concept that offering members low prices on a limited selection of nationally branded and select private-label products in a wide range of merchandise categories. It operates warehouses in the U.S., Canada, the United Kingdom, Japan and Australia and through majority-owned subsidiaries in Taiwan and Korea. The company warehouses present exclusive product category selections to be found under a single roof, which include appliances, auto and tires, baby, kids and toys, clothing and handbags, computers and printers, electronics, food and gift baskets, funeral, furniture, gift cards, tickets & floral, hardware health & beauty, home & decor, jewelry & watches, office products, patio, outdoor & pets, sports & fitness, travel & luggage. It also provides ancillary and other services that include gas stations, pharmacy, food court, optical, one-hour photo, hearing aid and travel. Costco Wholesale was founded by James D. Sinegal and Jeffrey H. Brotman in 1983 and is headquartered in Issaquah, WA.