Stifel analysts forecast that Costco Wholesale Corp. COST, -0.10% will raise membership fees by 8.3% in the next year. The increase would move Gold Star-level membership up $5 to $65 per year and Executive membership up $10 to $130 per year. “Costco shares have outperformed the S&P 500 in the 12 months leading to a membership fee increase announcement in each of the three price increases since 2006 (2006, 2011, and 2017),” analysts led by Mark Astrachan wrote. Costco shares are up 29.3% for the past 12 months while the benchmark S&P 500 index SPX, +0.06% is up 37.1% for the period. Stifel says there would 5% earnings-per-share upside in fiscal 2022 from the increase. The FactSet consensus is for fiscal 2022 EPS of $11.52. Fiscal 2021 consensus is for EPS of $10.70, up from $9.23 the year before. “We attribute share-price outperformance post announcement to the annuity-like nature of membership income (91% current renewal rate in U.S./Canada), which accounted for 2/3 of F2022 net income,” the note said.
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