Friday, October 13

Costco: The Winning Strategy

As earnings season kicks into high gear, we're really encouraged by how strong consumer spending is in certain areas. Sure, some retailers are really feeling the heat right now, but others are developing the right strengths to thrive in this more difficult environment. 

That's why we're still really bullish on Costco Wholesale Corp ($COST) as they move into Q4. The stock is experiencing some temporary headwinds after hitting our 2022 price target (read that argument here) but we're always excited when a stock hits our price target exactly on schedule! And we're even more bullish now that the market has pulled back slightly from Costco on a mix of 'worries'. 

However, we believe a lot of the concern hitting Costco right now is overblown and more structural in nature. That's because Costco is better set up to stabilize across a period of compressing consumer spending. There are also other catalysts (more on this below) that will launch America's best retailer ahead of the competition. 

We're in a very complex period in the market, and during those times of complexities, it's best to turn to the simplest strategies for winning. Let's get into the details. 👇

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