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July 26, 2021, 10:35 a.m. EDT

Costco will raise membership fees about 8%, Stifel forecasts

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By Tonya Garcia

Stifel analysts forecast that Costco Wholesale Corp. /zigman2/quotes/201191698/composite COST +0.05% will raise membership fees by 8.3% in the next year. The increase would move Gold Star-level membership up $5 to $65 per year and Executive membership up $10 to $130 per year. "Costco shares have outperformed the S&P 500 in the 12 months leading to a membership fee increase announcement in each of the three price increases since 2006 (2006, 2011, and 2017)," analysts led by Mark Astrachan wrote. Costco shares are up 29.3% for the past 12 months while the benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.95% is up 37.1% for the period. Stifel says there would 5% earnings-per-share upside in fiscal 2022 from the increase. The FactSet consensus is for fiscal 2022 EPS of $11.52. Fiscal 2021 consensus is for EPS of $10.70, up from $9.23 the year before. "We attribute share-price outperformance post announcement to the annuity-like nature of membership income (91% current renewal rate in U.S./Canada), which accounted for 2/3 of F2022 net income," the note said.

/zigman2/quotes/201191698/composite
US : U.S.: Nasdaq
$ 452.33
+0.22 +0.05%
Volume: 1.38M
Sept. 22, 2021 4:00p
P/E Ratio
42.52
Dividend Yield
0.70%
Market Cap
$199.86 billion
Rev. per Employee
$610,846
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/zigman2/quotes/210599714/realtime
US : S&P US
4,395.64
+41.45 +0.95%
Volume: 2.00B
Sept. 22, 2021 5:05p
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