Costco
Shares of Costco Wholesale Corp. (NASDAQ: COST) have slipped by nearly 8% over the past 12 months, including a year-to-date increase of around 4.7%. The company recently dropped its online photo service (Costco dropped its in-store service two years ago), and customers who failed to move their photos to Shutterfly by the end of January lost them. Not very customer friendly. Some analysts believe a hike in membership fees is about to come. Because the fees travel almost completely to the bottom line, the prior quarter’s EPS miss may give Costco the incentive to pull the trigger on a higher fee.
Analysts are generally positive on the stock, with 25 of 37 having a Buy or Strong Buy rating. The other 12 rate the stock at Hold. At a share price of around $479.00, the upside based on a median price target of $551.00 is 15%. At the high price target of $635.00, the upside potential is 32.6%.
Revenue for the second quarter of fiscal 2023 is forecast at $55.61 billion, up 2.2% sequentially and by 7.1% year over year. Adjusted EPS are forecast at $3.20, up 3.2% sequentially and 9.6% higher year over year. For the full fiscal year ending in August, estimates call for EPS of $14.29, up 7.7%, on sales of $244.08 billion, up 7.6%.
Costco stock trades at 33.5 times expected 2023 EPS, 30.0 times estimated 2024 earnings of $15.95 and 26.4 times estimated 2025 earnings of $18.15 per share. The stock’s 52-week range is $406.51 to $612.27. The company pays an annual dividend of $3.60 (yield of 0.74%). Total shareholder return for the past year was negative 7.64%.
Nordstrom
Department store operator Nordstrom Inc. (NYSE: JWN) shares the stage with Kohl’s and Macy’s this week, with all three reporting results. Kohl’s had a tough quarter, but the shares did not suffer much. Macy’s reports earnings on Thursday morning, and the comparison with last year’s results is not good. Shares got a boost when activist investor Ryan Cohen took a sizable stake in the company. The Nordstrom family, however, owns around 30% of the outstanding stock, so making changes could be harder than it was for Cohen at Bed Bath & Beyond.
Analysts are wary. Of 22 brokerages covering the stock, 14 have a Hold rating and only 3 have Buy ratings. At a price of around $19.00 a share, the stock trades close to its median price target of $19.50. At the high price target of $40.00, the upside potential is about 110%.
For the fourth quarter of fiscal 2023 that ended in January, revenue is forecast at $4.33 billion, up 22.2% sequentially but down 3.6% year over year. Analysts have forecast earnings per EPS of $0.67 for the quarter, up 233.5% sequentially and almost 50% lower year over year. For the full fiscal year, consensus estimates call for EPS of $1.62, up 8%, on sales of $15.54 billion, up 5.1%.
Nordstrom stock trades at 11.8 times expected 2023 EPS, 10.3 times estimated 2024 earnings of $1.86 and 10.3 times estimated 2025 earnings of $1.87 per share. The stock’s 52-week range is $15.53 to $29.59. The company pays an annual dividend of $0.76 (yield of 3.92%). Total shareholder return for the past year was 1.39%.
Originally published at 24/7 Wall St.
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