Street View: Membership muscle and AI bets to power Costco's growth

Retail chain Costco Wholesale COST.O beat Wall Street's first-quarter revenue and profit estimates as shoppers stocked up on essentials and discretionary items ahead of the holiday season

Reported quarterly revenue of $67.31 billion, topping estimates of $67.14 billion

Shares marginally down in premarket trading

CARTLOAD OF CONFIDENCE AHEAD

J.P.Morgan ("overweight," PT: $1,027) expects Costco's sales and executive memberships to keep growing, renewal rates to strengthen, and valuation to become more attractive by 2027

Morningstar (fair value: $640) "expect renewals to improve as COST builds out its data and tech platforms to deliver more targeted, personalized member communications"

Jefferies ("buy," PT: $1,050) expects strong sales growth, steady membership gains, and room for earnings to beat forecasts as Costco's leans on its size, technology, and brand strength

Bernstein ("outperform," PT: $1,146) sees renewal rates stabilizing and strong fee-income growth, with any short-term weakness likely balanced by rising retail media revenue