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Costco Wholesale Corp. bonds have been seeing bullish activity recently, according to information from the market-data company BondCliQ.
Data from BondCliQ show there has an uptick in net buying in Costco
COST,
bonds in the last 10 days. The following chart shows the most active Costco issues with net customer flows over that period.
BONDCLIQ
Related: Costco starting to see some prices come down, but not for food
In another bullish sign, Costco bond spreads have tightened to U.S. Treasurys, according to BondCliQ. The following chart shows two-week spread performance of selected Costco bonds.
BONDCLIQ
With only $1 billion of debt maturing next year, Costco has a “very manageable debt load” a market source told MarketWatch. The retail giant refinanced its debt during the pandemic, taking advantage of lower interest rates, the source explained.
Related: Costco is well positioned for 2024, boosted by gold bars and traffic growth, analysts say
Last week Costco reported fiscal first-quarter earnings and revenue that were largely in line with expectations, and also announced a special dividend of $15 a share.
The retail giant is riding a wave of strong traffic and membership growth that positions the company well for 2024, analysts say. Of 40 analysts surveyed by FactSet, 24 have an overweight or buy rating, 14 have a hold rating and two have an underweight or sell rating for Costco.
Related: Here is what’s in store for consumers and retail going into 2024
Costco’s stock has risen 46.1% in 2023, outpacing the S&P 500 index’s
SPX
gain of 24.2%. Shares of Costco are down 1.6% Wednesday, compared with the S&P 500’s decline of 0.02%.
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