Citi Resumes Coverage of Costco, Joining Brokers With Neutral-to-Buy Targets Near $1,000
The move underscores a wider debate over whether Costco’s strong sales and services justify its rich forward valuation.
Overview
- Citi restarted coverage with a Neutral rating and a $1,020 price target, joining other firms that place Costco between Hold/Neutral and Buy with targets roughly $1,000 to $1,130.
- Company-reported sales remain robust, with May net sales of $24 billion and $221.9 billion for the first 39 weeks, driven by membership fees, Kirkland private-label strength, and add-on services like pharmacy and gas.
- Analysts cite Costco’s scale, supply-chain efficiency, and international footprint as durable competitive advantages that support a premium multiple.
- Concerns center on moderating membership growth and a high forward P/E near 42, which some brokers view as limiting near-term upside despite the company’s sales momentum.
- Public commentators and some investors still recommend buying in tranches, but the coverage shows clear disagreement about how much growth justifies Costco’s current valuation and what investors should watch next.