Costco Wholesale Corporation COST shares were down in early trading on Friday, even after the company reported upbeat results for its fiscal fourth quarter.

The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

Truist Securities On Costco Wholesale

Analyst Scot Ciccarelli reiterated a Hold rating while raising the price target from $873 to $909.

Costco Wholesale delivered strong results for the fourth quarter, backed by robust sales growth, "with total core (ex-fuel/FX) comps of 6.9% and US core comps of 6.3%," Ciccarelli said in a note. "Costco's stacked growth continues to be the strongest/most consistent in our coverage," he added.

With gross margin expansion of 37 basis points (bps) to 12.68%, the company delivered adjusted earnings growth of around 13%, the analyst stated.

He raised the earnings estimates for fiscal 2025 and 2026 from $17.20 per share to $17.60 per share and from $18.50 per share to $19.25 per share, respectively.

BMO Capital Markets On Costco Wholesale

Analyst Kelly Bania maintained an Outperform rating while lifting the price target from $950 to $980.

Costco reported earnings of $5.29 per share for the fourth quarter, beating consensus of $5.08 per share, Bania said. Although the underlying earnings was $5.15 per share, this represents 12.7% growth, which brings the fiscal 2024 growth higher than the average of the past 10 years, he added.

The company achieved strong EBIT margin expansion in the year, of 30bps, the analyst stated. "We conservatively model 8%-9% EPS growth over the next five years, assuming COST reinvests the recent MFI (membership fee income) increase into value/GM%," he further wrote.

DA Davidson On Costco Wholesale

Analyst Michael Baker reaffirmed a Neutral rating while raising the price target from $780 to $880.

The focus of Costco's earnings release was on membership fee income (MFI) and gross margins, Baker said. "MFI was a bit below consensus, although growth remains solid, while gross margins were better than expected," he wrote.

Costco's offering "continues to resonate with consumers," the analyst stated. He added, however, that the company's full-year earnings of $16.56 per share was only 90 cents or 5.7% "ahead of the consensus forecast a year ago, and that includes $0.35 of one timers," which means the upward earnings revisions "have been only 3.5% excluding one-timers."

Check out other analyst stock ratings.

Roth Capital Partners On Costco Wholesale

Analyst Bill Kirk maintained a Neutral rating while upping the price target from $676 to $755.

Although Costco "continues to perform very well" and expressed confidence in the momentum continuing in fiscal 2025, management noted the year is likely to be "less linear," Kirk said in a note. While Costco lags behind peers in going digital, it added more third-party vendors and is working on personalizing the shopper experience, he added.

The company's inventory levels rose by 12% year-on-year in the fourth quarter, "the largest y/y increase since calendar 2022," the analyst stated. "While possibly loading ahead of potential port disruptions, investors are increasingly sensitive to inventory changes," he further wrote.

Telsey Advisory Group On Costco Wholesale

Analyst Joseph Feldman reiterated an Outperform rating while raising the price target from $925 to $1,000.

Costco’s delivered an earnings beat, driven by strong sales and better-than-expected operating margins, Feldman said. Total sales grew by 1.0% to around $80 billion, with "headline comp of 5.4% (US +5.3%, Canada +5.5%, Other International +5.7%) and core merchandise comp, ex-gas and FX, of 6.9% (US +6.3%, Canada +7.9%, Other International +9.3%)," he added.

Operating margins expanded 29 bps to 3.8%, driven by retail gross margin expansion of 39 bps to 11%, with a 9 bps increase in the core-on-core product margin, the analyst stated. "Overall, Costco’s 4QF24 adjusted EBIT dollars increased over 9% to ~$3.0B, reflecting profitable market share gains," he further wrote.

Oppenheimer On Costco Wholesale

Analyst Rupesh Parikh reaffirmed an Outperform rating and price target of $955.

Costco's adjusted earnings grew by around 6% to $5.15 per share, versus $4.86 per share in the prior year and ahead of consensus of $5.08, Parikh said. "Compared with our model, stronger gross profit dollars (benefits from gas and e-commerce) offset higher than modeled expenses and lower interest income," he added.

"In a mixed discretionary backdrop lately, COST continues to deliver steady share gains globally, and we expect strong momentum to persist for the balance of the year driven by superior merchandising efforts and the company’s unique value proposition," the analyst wrote. He further recommended investors with longer-term horizons take advantage of the softness of the stock following the results.

COST Price Action: Shares of Costco Wholesale had declined by 1.83% to $884.90 at the time of publication on Friday.

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