Costco stock prediction after receiving Street-high price target from Telsey

On Tuesday, Costco Wholesale Corp (NASDAQ:COST) shares edged slightly higher, extending the current six-week gains to 24.66%. The stock has been on a bull-run since the 13th of October amid an upbeat outlook of the holiday season sales.

On Tuesday, it received another boost after Telsey raised its price target to $600 per share from $540, retaining a buy rating. Analyst Joseph Feldman cited the upcoming monthly sales report for November, expressing optimism amid healthy consumer spending and Costco’s high member loyalty, focus on value, and improvement in digital sales.

Costco shares are now up more than 46% this year, despite the challenges created by the pandemic.

Should you bet on Costco’s growth?

From a valuation perspective, Costco shares trade at reasonable trailing 12-month and forward P/E ratios of 49.24 and 41.24. Therefore, it could be an interesting option for value investors.

In addition, analysts expect its earnings per share to grow by 25% this year, before rising at an average annual rate of about 11.74% over the next five years.

As a result, Costco could also gain the attention of long-term growth investors.

Technically, COST seems to be trading within a sharply ascending channel formation in the intraday chart. As a result, the stock has rocketed deep into overbought conditions, creating a perfect opportunity for a pullback.

However, with investors optimistically looking forward to the upcoming sales report, they could target extended gains at about $567.07, or higher at $577.25, while $543.58 and $533.38 are crucial support levels.