Costco Wholesale Corporation (COST) - Monthly Investment Analysis Report

Publication Date: October 15, 2025

Company Overview

Costco Wholesale Corporation (NASDAQ: COST), founded in 1976, operates a global chain of membership-only warehouse clubs. Based in Issaquah, Washington, Costco has established itself as a leader in the Discount Stores industry within the Consumer Defensive sector. The company's business model revolves around offering a wide array of goods at discounted prices, from groceries and fresh produce to electronics and home goods. Additionally, Costco provides ancillary services, including pharmacies and gas stations while expanding its e-commerce capabilities. The company's commitment to offering high-quality products at low prices has resulted in robust consumer demand, evidenced by the impressive total revenue of $275.24 billion generated in this sector.

In terms of market positioning, Costco remains a dominant player, outpacing many of its competitors due to its efficient supply chain, private-label products, and membership-based structure. The strategic decision to raise annual membership fees, the first hike in seven years, had a positive impact on revenue stream stability, further solidifying Costco's standing as a strong investment opportunity.

52-Week Price Performance Analysis

52-Week Price Performance Chart

The stock performance of Costco over the past 52 weeks shows a general bullish trend characterized by higher highs and higher lows. Currently priced at $943.04, the asset recently experienced impressive upward momentum, achieving a peak of $1,078.23 in June before retreating to its current level.

• Key Support and Resistance Levels:
• Resistance: $1,050, a pivotal level where the stock faced two significant pullbacks during March and June.
• Support: $900, an essential floor where the stock rebounded multiple times around October, January, and April. This support level signifies buyer confidence and has previously deterred further declines.

The fifty-day moving average is currently at $951.89, and with the stock trading slightly below this average, it suggests a potential short-term downtrend. Nevertheless, the stock is hovering near $946.51, where it tested the upward trendline, a critical juncture for potential bullish reversals. If the stock stays above this level and breaches the resistance at $1,050, it may return to its upward trajectory.

Lastly, the overall volatility indicated by the 52-week range--between $867.34 and $1,078.23--highlights the need for investors to stay vigilant and assess market conditions regularly.

Financial Performance and Metrics

Costco's financial performance demonstrates resilience and growth potential. For the fiscal third quarter ending May 2025:

• Net Sales: Increased by 8.0%, totaling $61.96 billion.
• Net Income: Rose to $1.90 billion ($4.28 per diluted share) from $1.68 billion ($3.78 per diluted share) year-over-year.
• EBITDA: Standing at $12.81 billion, the company showcases strong operational efficiency and profitability.

The total outstanding shares number 443,179,176, with a float of 441,938,274 and relatively low short interest of 1.51%. The calculated mean price target stands at $1,060.37, with a high target of $1,218.00, suggesting an anticipated significant growth opportunity in the near term. This healthy financial outlook further solidifies Costco's status as a potentially valuable addition to any investment portfolio.

Recent News and Developments

Recent developments surrounding Costco have been noteworthy:

1. Net Sales Growth: With an 8.0% increase in net sales above last year's performance, Costco continues to thrive amidst challenging market conditions.
2. Dividend Increase: In April 2025, Costco raised its quarterly cash dividend from $1.16 to $1.30, highlighting the company's commitment to delivering shareholder value (source).
3. Membership Fee Increase: The hike in membership fees, announced in July 2024, further strengthens Costco's revenue model after maintaining rates for seven years during a period of significant inflation (source).

As of October 15, 2025, the stock price has seen a reconciliation, closing at $961.81, reflecting stability amidst market fluctuations and leading to a 1.62% increase from its previous close.

Market Sentiment and Analyst Recommendations

Analysts are optimistic about Costco's stock performance, with sentiments skewing heavily towards a "Buy" rating. A consensus of 26 analysts provides an average price target of $1,064.28, representing an upside of roughly 13.76% from current levels. This strong buy recommendation, supported by a mean score of 1.97222, reflects a broad confidence in Costco's profitability and market position.

Notably, Evercore ISI adjusted its price target to $1,060.00, signaling continued positive outlooks despite the recent market fluctuations (source).

Summary of Investment Opportunities and Risks

While Costco's stock presents several compelling investment opportunities, it is essential to recognize the associated risks.

Opportunities: - Strong sales growth driven by expanding e-commerce and rising membership fees. - Robust financials and high EBITDA, indicating strong operational efficiency. - Low short interest suggests confidence among investors.

Risks: - Current trading price is below the moving average, indicating a potential short-term downtrend. - Market volatility and external economic conditions could influence stock performance.

In conclusion, with its strong financial performance, reliable growth trajectory, and market leader position, Costco Wholesale Corporation offers an intriguing investment opportunity for retail investors seeking stability combined with growth. The cautious bullish sentiment suggests monitoring key price levels over the coming weeks will be vital for making informed investment decisions.