Costco Wholesale Corp (NASDAQ:COST) shares climbed on Friday as investors weighed its positioning in a K-shaped economy.
The warehouse giant continues to leverage value pricing and loyal members to sustain traffic across income groups.
• Costco Wholesale stock is gaining positive traction. What’s driving COST shares up?
BofA Securities analyst Christopher Nardone reinstated coverage on the stock, with a price forecast of $1,185.
Nardone said Costco remains “well positioned” in today’s K-shaped economy. He said the retailer appeals to higher-income shoppers while attracting value-focused consumers.
Analyst’s Take In Detail
Nardone noted Costco reinvests in price and wages to strengthen long-term share gains.
The analyst said that valuation reflects confidence in steady comparable sales and durable margins.
Nardone described Costco as a pricing leader that consistently draws substantial traffic.
The company typically lowers prices when food inflation eases, boosting store visits. The analyst highlighted Costco’s streamlined SKU model as a competitive edge.
He said the focused assortment supports quality, innovation and pricing discipline. Nardone pointed to the Kirkland brand, which accounts for about one-third of sales. The private label enhances supplier leverage and protects merchandise margins, and the analyst called executive membership the company’s crown jewel.
Nardone noted recent growth in executive tiers signals customers trading up for added benefits, adding that executive members represent roughly half of total members and most revenue.
He acknowledged a modest renewal slowdown but viewed shifting demographics as constructive.
The analyst said younger, digitally engaged members expand Costco’s long-term opportunity.
Nardone identified e-commerce execution and AI investment as key medium-term risks.
COST Price Action: Costco Wholesale shares are trading higher by 1.37% to $1,001.26 at publication on Friday.
Photo: Tada Images via Shutterstock
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