Costco: Q3 Results Point To Growth Acceleration Ahead (Archive)
Costco’s lower input costs, new warehouses, and bullish technicals support accelerating growth.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Lower agricultural commodity prices outlooks can help Costco strengthen its market position, pass savings to customers, and gradually expand margins.
- Investments in new warehouses can drive higher traffic overall and accelerate revenue growth despite initial cannibalization of existing warehouses.
- Costco’s valuation premium vs. comps is justified as its superior business model has delivered vastly superior shareholder returns. Encouragingly, the current COST premium vs. comps is slightly below historical averages.
- COST's technicals vs. SPX500 look good, as the ratio prices are bouncing off a key support level in a strong way.
- Tariffs remain a risk that can put pressure on margins, but import data and commodity price trends suggest limited impact so far.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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