Costco Wholesale Corporation’s (NASDAQ: COST), last night, financial results weren’t all rainbows and cupcakes.
The retail giant’s fiscal Q4 results were slightly below expectations for revenue, membership fees, and overall comparable sales. This led to a 2.0% decline in the share price of its stock on Friday.
Jim Cramer, the famous investor, says that there is nothing particularly alarming in the company’s latest quarterly report.
The report only increased his confidence in Costco, which he now believes will reach $950.
Cramer’s latest price target suggests that the stock could gain nearly 7.0% from here.
Costco is not a cheap stock to own
Jim Cramer is still positive on Costco Wholesale, as the revenue miss was insignificant. He recommends that investors focus on the significant increase in gross margins which led to a beat in earnings.
Mad Money host says that the recent jobs data has increased fears of an imminent economic slowdown. But the Washington-based company has done well in the past against such a background and will likely continue to do so moving forward.
Costco is the world’s best-run retailer and the store of choice of price-conscious shoppers, he told his investing club members on Friday.
Cramer acknowledged that Costco’s stock is not cheap at the moment, but said its 0.52% yield was another reason to keep it in your portfolio.
Costco stock to benefit from recent price hike
Jim Cramer, former hedge fund manager, recommends Costco stock because Gary Millerchip, chief of finance at the company, said that the price hike implemented by the company earlier this month would take several quarters to reflect in the financials.
He told investors and analysts during the earnings call that the vast majority of the benefits would come in the second half of 2025, and the fiscal year 2026.
Nearly 50% of those who signed up for a Costco membership during fiscal 2024 were under 40 years old.
Signing up younger members gives the retailer an opportunity to keep them loyal over many years.
Cramer is confident that Costco will continue to be the best value for consumers and that investors will continue rewarding its shares by increasing their multiples due to its solid customer loyalty.
Wall Street analysts also share his optimism.
Costco’s highest price target is $1,050. This translates into an 18% increase from the current level.
This post Costco Stock could have more surprises instore despite its YTD rallies may be modified as new updates unfold
This site is for entertainment only. Click here to read more
