Why Jeffries Boosted Its Costco Price Target to $425

The video discusses Costco's growth opportunities, highlighting its credibility with consumers and potential in digital and omnichannel spaces. It examines the competitive retail landscape, emphasizing customer displacement and the rise of broadline retailers like Costco. The discussion also covers Costco's membership model as a significant revenue stream and explores the impact of COVID-19 on consumer behavior, including bulk purchasing and safety concerns in shopping environments.

What factors contribute to Costco's potential for future growth?

• Decrease in shopping cart size

• Increase in new customer acquisition and larger shopping baskets

• Decline in consumer credibility

• Reduction in profitability

What is a significant untapped opportunity for Costco?

• Increasing membership fees

• Reducing product variety

• Expanding physical store locations

• Enhancing their online sales and omnichannel experience

How does Costco's membership model contribute to its revenue?

• It accounts for a small portion of their EBIT

• It is only beneficial during economic downturns

• It is not a reliable source of income

• It is a significant and sustainable revenue stream

How might potential lockdowns affect consumer behavior towards retailers like Costco?

• Consumers will avoid bulk purchasing

• Retailers will see a decline in sales

• There will be a decrease in home cooking

• Consumers may plan more bulk purchases and prefer safer shopping spaces

What advantage does Costco have in terms of shopping safety?

• Narrow aisles that limit interaction

• Wider aisles that allow for safer shopping

• Limited product availability

• Higher prices that deter crowds