Costco (COST, Financial), famous for its $1.50 hot dogs, continues to see its stock price soar, becoming a high-priced investment. Despite a slight drop in stock price following a report of 5.6% sales growth in November, analysts remain optimistic about Costco's performance. Jefferies analyst Corey Tarlowe maintains a "buy" rating, raising the target price to $1,145, citing strong sales despite currency and holiday timing impacts.
Costco's stock has risen nearly 50% this year, outperforming the S&P 500's 28% gain. However, its forward P/E ratio of 54 is significantly higher than its historical average of 38. Analysts believe Costco's strong business model and member-driven sales justify its premium valuation.
Costco's upcoming earnings report on December 12 will be closely watched, with expectations of continued strong growth under new leadership.
