Connect with us

Hi, what are you looking for?


Buy Costco shares as they ‘benefit from higher levels of food inflation’

Shares of Costco Wholesale Corporation (NASDAQ: COST) ended more than 5.0% down this evening on talks of another 75 basis points increase in interest rates next week.

Costco shares benefit from inflation

On Tuesday, the U.S. Bureau of Labour Statistics said consumer prices remained near a forty-year high of 8.30% in August. For the month, inflation was actually up 0.1%.

Still, a Senior Oppenheimer Analyst – Rupesh Parikh likes Costco shares as they stand to benefit from such pressures. On CNBC’s “Power Lunch”, he said:

Costco is still a good bet. The business actually benefits from higher levels of food inflation. So, in the latest quarter, we think Costco saw about a seven-percentage point benefit to the top-line related to inflation.

Food prices, in August, were up 0.8% on a month-over-month basis.

Costco caters to higher income consumers

Last month, Costco said its net sales were up more than 15% in the fourth financial quarter.

The chain of membership-only big-box retail stores is better-positioned to navigate through the inflationary pressures also because it caters primarily to the higher income consumer. Parikh added:

In this environment, the middle-income consumer will go even more frequently to Costco to get the value. At the gas pump, you save money every day and on grocery items, you can save 20% plus. So, they’ll continue to see traffic and share gains.

The Nasdaq-listed retailer has a dividend yield of under 1.0% as well.

Wall Street also has a consensus “overweight” rating on Costco shares that are already up more than 20% over the past four months.

The post Buy Costco shares as they ‘benefit from higher levels of food inflation’ appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like


    Reprinted from the Future of Freedom Foundation President Biden’s campaign to banish (or maybe outlaw) political paranoia took a wallop last spring. In April,...


    Inflation appears to be on the decline. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew...

    Editor's Pick

    It’s already a cliché, but technology is rapidly improving. And for many businesses, it’s hard to catch up. However, it’s not just the average...

    Editor's Pick

    At Broadband World Forum 2022, Fibocom launched 5G module FG370 based on MediaTek T830 platform, aiming to empower the deployment of 5G FWA for...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2022 All Rights Reserved.