Costco (NASDAQ:COST) has seen its valuation rise rapidly, as the market has been convinced to benchmark the stock against e-commerce giants rather than traditional retailers. With Amazon (AMZN) sporting a forward P/E of 63.8, COST’s forward
Costco Is A Great Stock With A Rich Valuation
Summary
- Costco is admirably well-managed.
- The current valuation is uncomfortably high.
- The Wall Street analyst consensus remains bullish, but indicates almost no upside from the current share price.
- The market-implied outlook is bullish to early 2022.
- I am changing my rating from bullish to neutral.
Geoff has worked in quantitative finance for more than twenty years. Before entering finance, Geoff was a research scientist for NASA. Geoff holds a PhD in Atmospheric Science from the University of Colorado - Boulder and a BS in Physics from Georgia Tech. Neither Geoff Considine nor Quantext (Geoff's company) are investment advisors. Nothing in any commentary here on Seeking Alpha or elsewhere shall be regarded as advice.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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