Costco (COST) Stock is the Winner of Monday’s Rally with 9.96%, Today It’s Also in Green
Mar 3, 2020 at 6:19 pm UTC by Tolu Ajiboye · 3 min read
Costco stock is directly poised to enjoy a heavy surge in related supplies as the coronavirus outbreak causes people to start bulk buying.
Because of the coronavirus epidemic, news about stock crashes are no longer surprising. Many companies have had some losses because the outbreak has serious adverse effects on their books and their general business. What makes the situation worse is that the coronavirus is still spreading and there is little to no hope of a solution anytime soon. However, some stocks seem to be properly braced for impact and are still climbing higher in a season of plunges. One of those is Costco Wholesale Corporation (NASDAQ: COST) stock.
Costco (COST) Stock Jumped
In the U.S., authorities have confirmed that there are 91 cases of the new coronavirus COVID-19 strain. Authorities also confirmed two deaths. Because of this news, fear is beginning to spread and many people are starting to do a lot of bulk-buying out of panic. News of the Costco situation pushed its shares up by 9.96%. At the moment of writing, on Tuesday, COST is 0.58% up at $310.03.
With this development, Costco (COST) stock is now cemented as one of the stocks somewhat immune to the coronavirus. In a market where several large companies including Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) are taking a hit and even reducing their targets for the quarter, Costco might be having a field day.
Costco (COST) Stock Rising from In-Store Demand
The company’s stock did crash last week, just like most others. It recorded more than 12% in loss when it became clear that the coronavirus was not going anywhere anytime soon. But things changed as panic spread more.
All over the internet, there are several pictures of long lines at Costco stores in many places. The amount of traffic the franchise is currently seeing as a result of the panic is not expected. This might be good for Costco stock.
There are also many reports that Costco is regularly running out of supplies. Items that help with protecting against the spread of the virus are running out quickly. Some of these include toilet paper, disinfectants, hand sanitizers and many more related products.
The situation might also be a boost to other companies that supply Costco with the materials it sells. As the company sells out, the suppliers will have to work round-the-clock to make sure that they can continue replacements. For now, many Costco shelves run out often.
The Near Future in the US
According to Costco CFO Richard Galanti, the surge in demand started last week and still continues. Market analysts are now patiently waiting for Thursday, when the company will publish its quarterly earnings result. Regardless, Galanti is not sure that the situation will stretch long enough for any serious impact on Costco. He also suggests that the situation leaves everyone at a disadvantage. He is optimistic:
“It’s only one week of sales. We’re all waiting for this thing to end.”
He also says that the company’s recent spike in sales will not show in the soon-to-be-released quarterly figures. He, however, adds that Costco will publish sales figures on that day, which will include last week’s numbers.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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