1249 ET - Costco reported overall strong fourth-quarter earnings, but slowing membership growth may be cause to revisit the stock's valuation, Truist analysts write in a note. They cut their price target to $955 from $1,011. The company's membership growth fell to 3.8%, representing eight straight quarters of deceleration. Some of the slowdown comes from new locations meant to relieve volume pressures on other stores, as well as a less frequent buying cadence in Asia, the analysts write. Costco's high multiple "magnifies the smallest warts," they write: "at 40x+ earnings, we think that even the smallest issues are magnified and we may need to see member growth reaccelerate to help re-rate the stock's multiple." Shares rise 2.3%.
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Costco's Membership Growth Slows in Otherwise Strong Quarter
Dow Jones00:49
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