COST Stock Draws Street Attention After $30 Cash Dividend – Mizuho Highlights Significantly Higher Payout, Bernstein Eyes Q4 Trends

• Mizuho lifted its price target to $1,100 from $1,065, maintaining ‘Outperform’ and noting that Costco’s special dividend exceeded its previous forecast.
• The analyst cited continued strength in Costco's fiscal first-quarter performance to date, according to Investing.com.
• Twenty-five out of 41 analysts covering the stock rate it ‘Buy’ or ‘Strong Buy’, while fourteen rate it ‘Hold’ and two rate it ‘Sell’ or ‘Strong Sell’, according to Koyfin data.

Costco Wholesale Corporation (COST) shares drew investor attention on Wednesday after Bernstein and Mizuho raised their price targets on the retailer while maintaining 'Outperform' ratings.

According to The Fly, Bernstein raised its price target to $1,155 from $1,143, while Mizuho lifted its target to $1,100 from $1,065.

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COST shares traded 1.2% higher at the time of writing.

Costco announced on Tuesday a one-time cash dividend of $30 per share, amounting to an estimated total payout of approximately $13.3 billion. The dividend is payable on December 4 to shareholders of record as of November 24.

Mizuho Sees More Cash For Future Investments

According to The Fly, Mizuho said the payout was significantly higher than its previous forecast of $18–$20 per share and represented a yield of 2.8% in addition to the retailer's regular quarterly dividend.

Mizuho viewed Costco's reauthorized share-repurchase program of up to $4 billion, alongside the approximately $13.3 billion special dividend payout, as evidence that the retailer had more cash available than immediate deployment opportunities, according to a separate report published by Investing.com.

The firm also expressed optimism that this could be Costco's last special dividend announcement, expecting the company's ongoing free cash flow to support investments in e-commerce, rapid delivery, and retail media, according to Investing.com.

The analyst modestly raised its estimates, citing continued strength in Costco's fiscal first-quarter performance to date, Investing.com added.

Bernstein Flags Costco's Q3 Exit Rates

Bernstein said investors heading into Costco's third-quarter earnings will focus on management's commentary about Q3 exit rates and Q4 quarter-to-date trends to assess the sustainability of the company's momentum into next year, according to The Fly.

Twenty-five out of 41 analysts covering the stock rate it ‘Buy’ or ‘Strong Buy’, while fourteen rate it ‘Hold’ and two rate it ‘Sell’ or ‘Strong Sell’, according to Koyfin data. Their 12-month price target ranges from $770 to $1,315, with an average of $1,073.35.

How Retail Views COST

On Stocktwits, retail sentiment toward COST remained in the ‘bullish’ territory, amid ‘high’ message volume in the past 24 hours.

COST shares have gained over 25% year-to-date.

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