Bank of America Sets $1,185 Target, Cites 20% Upside for Costco
Bank of America reinstated coverage on Costco with a Buy rating and $1,185 price target, citing 20% upside from its 135 million members and 96% U.S. renewal rate driving $5.2 billion profit. Q1 earnings beat at $4.50 per share on $65.98 billion revenue with 5.9% U.S. comparable sales growth.
1. Bank of America Reinstates Coverage
Bank of America reinstated coverage on Costco with a Buy rating and $1,185 price target, highlighting the company’s strong membership base and high renewal rates as key drivers of future upside.
2. Membership Model Drives Profitability
Costco’s 135 million cardholders and 96% U.S. renewal rate generate $5.2 billion in near-pure-profit membership fees, providing a stable cash flow foundation that supports aggressive pricing and customer loyalty.
3. First-Quarter Outperformance
In the first quarter, Costco reported $4.50 earnings per share on $65.98 billion revenue, surpassing expectations, while U.S. comparable sales rose 5.9%, bolstered by core retail strength and 22% e-commerce growth.