Why Wall Street Analysts are Cautious on Costco Wholesale's Future Growth
Thursday, 4 April 2024, 11:41
Why analysts are cautious on Costco
Gordon Haskett is still positive on the direction of Costco's business, but near-term uncertainties are starting to creep into the picture, such as rising gas prices, a shorter holiday shopping season than last year, and the uncertainty around the upcoming election.
Factors affecting sales growth
- The increase in gas prices poses a significant risk to Costco's sales growth amidst high inflation.
- Costco reported a growth deceleration in 2022 amid economic challenges.
Stock valuation and caution
- Costco's stock is trading at historically high valuations based on P/E and P/S ratios.
- The current P/E ratio of 46 is the highest since 2000, raising concerns for investors and analysts.
While Costco's growth trajectory is strong, its stock valuation indicates caution for investors in the current market conditions.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.