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Is Costco Stock Underperforming the Dow?

While Costco has struggled to keep up with the Dow Jones Industrial Average over the past year, analysts remain fairly bullish on its outlook.

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Issaquah, Washington-based Costco Wholesale Corporation (COST) is one of the world’s largest membership-based warehouse retailers. The company has a market cap of $414.5 billion and operates large, no-frills warehouses and e-commerce sites, offering groceries, fresh food, electronics, appliances, apparel, furniture, jewelry, tires and other merchandise, alongside gasoline, pharmacy, optical and food-court services.

Companies with a market cap of $200 billion or more are typically referred to as "mega-cap stocks." Its biggest competitive advantage is its membership-based, low-price business model. Its scale allows it to buy merchandise in huge volumes and operate with a limited SKU assortment, efficient distribution, and relatively low overhead, enabling it to offer consistently low prices while maintaining strong customer loyalty.

COST stock reached its 52-week high of $1096.50 on May 19, and has slipped 13.8% from that peak. The stock has declined 5% over the past three months, underperforming the Dow Jones Industrial Average’s ($DOWI) 5.7% uptick during the same time frame.

COST is up 9.6% on a YTD basis, and has gained marginally over the past 52 weeks, underperforming the DOWI’s 11.4% and 17.4% over the same time frames, respectively.

COST has faced volatility and has recently climbed below its 50-day and 200-day moving averages, indicating a downtrend.

Costco Wholesale has underperformed the broader market as slowing sales growth and weaker momentum have weighed on investor sentiment. The boost from elevated gasoline prices has faded as fuel prices declined, reducing the benefit from fuel-related sales and traffic. At the same time, investors have grown more cautious about membership saturation, rising operating expenses and tariff uncertainty, all of which could pressure margins.

When stacked against its closest peer in the discount stores industry, Walmart Inc. (WMT) shares have climbed 7.3% over the past 52 weeks, outperforming COST stock.

Wall Street’s view of COST stock is moderately optimistic. Among the 36 analysts covering the stock, the overall consensus rating is “Moderate Buy.” Its mean price target of $1,101.56 suggests 16.5% upside potential from current price levels.

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참고 자료Yahoo Finance

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