Costco Stock Price Trades Near Record Highs As Panic Shopping Boosts Sales

Shares of Costco (NASDAQ:COST) have rallied more than 12% this week after the company reported stronger-than-expected sales for the latest quarter. The stock price has now nearly returned to record highs despite the coronavirus market selloff.

Fundamental analysis: Panic buying boosts sales

The Washington-based warehouse giant reported adjusted earnings of $2.10 per share on sales of $931 million compared to Wall Street expectations of $2.05 per share. For the same period last year, Costco earned $2.01 per share on the sales of $889 million.

Sales grew 11% to $38.3 billion, beating analysts' estimates of $38.2 billion. Same-store sales increased 9%.

Analysts believe that Costco may continue to benefit from the panic shopping.

The company said it believes that around 3% of the increase can be related to consumers’ concerns regarding the coronavirus outbreak. Earlier, photos emerged of empty shelves of sanitizers at Costco.

Technical analysis: The stock price almost fully recovered

Shares of Costco have almost fully recovered after dropping nearly 20% from the record highs above the $325 mark. It is actually one of the very rare stocks to have managed to perform a “V turn” and fully recover in the past two weeks.

The stock price still trades lower, however, it has put itself in a much better position compared to the rest of the market. Shares are now testing the key short-term support in the range of $302 - $307, while a break of this level would open the door for a deeper pullback.

On the upside, the all-time high at $325.26 remains the target for the bulls in case the risk appetite improves.

Summary

Shares of Costco trade near the record highs despite the broader market selloff amid the coronavirus outbreak. The US-based warehouse giant reported better-than-expected quarterly sales.