Bernstein Maintains Buy on Costco Wholesale (COST) Stock

Costco Wholesale Corporation (NASDAQ:COST) is one of the Best Stocks to Buy According to Brasada Capital Management. On July 21, analyst Zhihan Ma from Bernstein maintained a “Buy” rating on the company’s stock, while keeping the price objective of $1,153.00. This rating is backed by compelling factors demonstrating Costco Wholesale Corporation (NASDAQ:COST)’s healthy market position and growth potential. While it has an elevated valuation, the company’s strong earnings growth justifies it. The expansion of Costco Wholesale Corporation (NASDAQ:COST)’s store network happens to be a significant driver of membership growth, and the appeal of the value proposition ensures increased retention and traffic among members, added the firm’s analyst.

Furthermore, Kirkland Signature, Costco Wholesale Corporation (NASDAQ:COST)’s private label brand, plays a key role in the value proposition. Kirkland Signature is an important factor in customer satisfaction and loyalty. The analyst opines that international markets are anticipated to fuel further store and membership growth, and Kirkland Signature will remain critical in maintaining Costco Wholesale Corporation (NASDAQ:COST)’s high customer loyalty. Notably, Costco Wholesale Corporation (NASDAQ:COST) saw net sales of $26.44 billion for the retail month of June, the 5 weeks to July 6, 2025, reflecting 8.0% growth from $24.48 billion last year.

Patient Capital Management, a value investing firm, released its Q2 2025 investor letter. Here is what the fund said:

“We initiated an options position in Costco Wholesale Corporation (NASDAQ:COST) (COST 1/16/26 P960) during the quarter, purchasing at-the-money puts with a 2026 expiration. We’ve consistently highlighted the risk lurking in the “overpriced compounder” segment of the market, and we view Costco as a prime example. The stock is currently trading at 54x earnings despite growing only at a mid-single-digit rate. While Costco is undoubtedly a well-run business, we believe paying more than twice the market multiple for a low-growth, low-margin retailer is difficult to justify. At some point, we expect the market to reassess the premium valuation being placed on Costco’s fundamentals. When it does, we believe the stock could face meaningful downside from its current all-time high multiple.”

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Disclosure: None. This article is originally published at Insider Monkey.