Costco Stock Dips on Bear Note

By Laura McCandless / April 09, 2020 / www.schaeffersresearch.com / Article Link

Candlestick patterns in options tradingDeutsche Bank cut its price target to $295 from $300

Costco Wholesale Corp (NASDAQ:COST) is down 2% to trade at $299.76, after a price-target cut from Deutsche Bank to $295 from $300. The analyst stated that Costco's core same-store sales and U.S. comp sales for March fell short of their expectations, as stock-up strength faded and customers stayed home.

COST has taken a number of volatile swings since its record high of $325.26 on Feb. 21, amid new social distancing measures such as halting free samples . With consistent support around the $280 region, the equity recently toppled its 120-day moving average for the first time since late March. The equity is up24.9% year-over-year.

Analyst sentiment remains optimistic, with 14 out of 21 sporting a "strong buy" or "buy," and six considering a lukewarm "hold," with only one carrying a "strong sell." Meanwhile, the current target price of $323.67 is an 8% premium to current levels.

The options pits echo optimism as well, with 1.66 calls bought for every put in the past 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 70th percentile of its annual range, suggesting the appetite for calls is higher than usual.