Costco bonds attracting bullish activity

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.

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%.