BUZZ-"Street View": Costco issues special dividend and launches $4 billion stock buyback plan, bringing early holiday cheer

November 11 - ** Membership-based retailer Costco COST.O saw its share price rise about 1% in pre-market trading, quoted at $1,080.83

** On Tuesday, the company announced (link) a special dividend of $30 per share and reapproved a $4 billion share buyback program valid through November 2030, replacing the plan set to expire in January next year

** According to data from London Stock Exchange Group (LSEG), the median target price from 41 brokers covering the stock is $1,097.50

** Costco (COST) is up about 23% year-to-date; the S&P 500 Consumer Staples Index is up 18%, while Walmart is up nearly 13% so far this year

The special dividend has enhanced market confidence in Costco’s business

** Telsey Advisory Group (rating “Outperform”, target price: $1,135) stated that the special dividend is an early holiday gift for investors

** Jefferies (rating “Buy”, target price: $1,100) noted that strong execution, robust cash flow generation, and shareholder returns continue to support Costco’s appeal as a high-quality defensive stock

** Oppenheimer (“Outperform”, target price: $1,160) expects the special dividend will significantly reduce interest income

** Still sees the potential for a future stock split, which could serve as another positive catalyst for the share price

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