There are several catalysts that could push the company’s shares higher, according to one pundit.
Tuesday was a slow and largely unmemorable news day for Costco Wholesale (COST 1.84%). Still, the big retailer’s stock landed comfortably in positive territory, rising by nearly 2% on the day against the S&P 500 index’s marginal gain of 0.2%. A glowing analyst note about the company’s current performance and looming future was a tailwind for that increase.
More attractive products, more attractive company
Before market open, Oppenheimer‘s Rupesh Parikh published a new research note on Costco. In his latest analysis of the retailer, he waxed optimistic on its future, devoting particular attention to across-the-board improvements in its product mix.
Parikh wrote that
[W]e continue to see improvements in the quality of Costco’s treasure hunt from stronger brands in apparel/consumer durable offerings to a more powerful assortment of discounted gift cards in store. Against a mixed discretionary backdrop lately, we believe this has contributed to a meaningful improvement in non-foods category trends and the company’s standout performance.
The analyst added that he anticipates this momentum will carry Costco through the end of 2024.
In his note, Parikh reiterated his outperform (buy, in other words) recommendation and price target of $925 per share.
Is a stock split coming?
Parikh also mentioned that Costco could potentially be the next big-name, publicly traded company to enact a stock split. While it has pulled the stock-split lever several times previously, the last such action occurred in January 2000. Meanwhile, the company’s popularity with investors has pushed its share price close to four-digit territory, as it most recently closed just shy of $909 per share. Companies frequently conduct stock splits when their equity gets that expensive on a per-share basis.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
