Costco stock is $1,066, near its 52-week high, after passing Kroger in grocery share — buy now or wait for a pullback?
Costco closed around $1,066 today, up about 12 percent over the last month and sitting just under its 52-week high of $1,096.50. October sales were strong — net sales up 12.6 percent to $24.5 billion, digital sales up 22.5 percent — and Costco just passed Kroger in a grocery market-share ranking that people are talking about. But the analysts are split: Freedom Broker cut it to Hold today with a $1,050 target, while Bank of America kept a Buy at $1,095, and the stock trades at roughly 51 times trailing earnings against a sector median near 22. I have been waiting for a dip that never comes. Is this a buy at these levels, or is the smart move to wait for earnings on December 10 and hope for a pullback?
1 answer
- Wait for a pullback, or buy in pieces
I love Costco as a business — the membership model is basically a subscription that prints money, and passing Kroger in grocery share is a real thing. But 51 times earnings is a lot to pay for a grocer, even a great one, and every analyst note this week is basically saying the same thing: great company, price already reflects it. If you want in, I would buy a third now and keep the rest ready for earnings on December 10, when even a small miss could knock it down 5 percent. Chasing it right under the all-time high is how you end up holding the bag for a year.