Costco Price Target (COST) Raised at Morgan Stanley

Morgan Stanley has increased its price target for Costco stock (COST) to $1,150 from the previous $950, maintaining an Overweight rating on the stock. This adjustment reflects the firm's confidence in Costco's strengthening business fundamentals.

Costco's recent financial performance has shown notable improvement, with key metrics indicating accelerated growth. The company's robust value proposition continues to attract a growing membership base, while enhancements in e-commerce capabilities have expanded its market reach. Additionally, income from membership fees remains a significant contributor to Costco's revenue stream.

Looking ahead, these factors are expected to sustain Costco's positive momentum through 2025. The combination of a compelling value offering, advanced online shopping options, and steady membership fee income positions the company for continued success in the retail sector.

In recent periods, Costco offered up strong numbers, contributing to the stock's growth, delivering across various across key metrics. Net sales for the 12 weeks ending November 24, 2024, climbed 7.5% year-over-year to $60.99 billion, up from $56.72 billion in the previous year. Net income also saw a significant boost, reaching $1.8 billion, or $4.04 per diluted share, compared to $1.59 billion, or $3.58 per share, a year earlier.

Comparable sales were also strong, with U.S. same-store sales increasing by 5.2% and Canadian sales rising 5.8%. E-commerce continued its upward trajectory, posting a 13% growth year-over-year. Membership fee revenue, a key contributor to Costco's business model, grew by 7.7% to $1.17 billion.

Costco's stock price has outperformed the indices this year, with gains of 51.91% year-to-date taking the company to new all-time-highs above the $1,000 ceiling, with an intra-day high of 1,007.80 hit during yesterday's session. COST is down 0.8% in this morning's pre-market.