Costco updated December 12, 2021

Costco is updated and rated Sell at $559. It’s a fantastic company and will will continue to grow its earnings at a strong rate for the foreseeable future. But the P/E ratio at 47 is, I believe, its highest ever. And this comes at a time when its earnings have recently grown very rapidly and it could certainly face lower earnings growth in 2022. And it comes at a time when the consensus appears to be that interest rates will rise which should push down the P/E of stocks in general. So, the high P/E suggests a rating of Sell. On other hand I acknowledge that the company has almost always looked expensive and selling it it in the past has always been a mistake. And it is also possible that inflation will benefit Costco as people go there for cost savings and they may be able to pass all price increases along. Be aware too that 18 of 24 analysts that cover it rate it a Buy and the other 6 say Hold. 

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