Key Takeaways
- Alphinity Investment Management sold all of its Costco, American Express and Intuitive Surgical shares in the third quarter, its latest 13F shows.
- The Costco exit looks smartest: the stock trades at 46x forward earnings with 3% left to analysts’ average target.
- American Express is the one I’d buy back, at 17x forward earnings with about 12% upside to its average target.
Alphinity Investment Management, a Sydney-based manager with $4.51 billion in US stocks, just cleared three household names out of its portfolio: Costco Wholesale (COST), American Express (AXP) and Intuitive Surgical (ISRG).
All three were in the fund on June 30. Its 13F for the quarter ended Sept. 30, filed Nov. 2, shows none. The filing doesn’t say when Alphinity sold or at what price. What you can check is whether each stock still earns a place in your portfolio.
Costco’s premium is hard to defend
Costco was the biggest of the three: 221,056 shares worth $207 million on June 30, or 3.4% of the fund. The stock then rose 14% between Sept. 30 and the Nov. 2 filing.
Membership fees brought in $5.9 billion in fiscal 2026, equal to about half of Costco’s $11.7 billion in operating income, and paid-member growth slowed every quarter, from 5.2% to 3.8%. Yet the stock trades at 46x forward earnings, above its five-year average of 43x and its 12-year average of 36x, for normalized EPS growth of about 10% a year through fiscal 2029.
Analysts’ average target barely moved in a year, from $1,057 to $1,068, while the stock climbed from $928 to $1,041:
The stock has all but caught up with the Street.
American Express is the one I’d have kept
AmEx was next: 507,205 shares worth $172 million, or 2.9% of the fund. The stock rose 8% between Sept. 30 and Nov. 2.
On Oct. 23, the company raised its 2026 EPS outlook and reaffirmed about 10% revenue growth after third-quarter revenue rose 9% to $20.1 billion. It also took a $336 million restructuring charge to cut about 3,500 jobs.
Analysts’ average target rose from $351 to $366 over the year, while the stock fell from $362 to $328:
That leaves AmEx with about 12% upside to the average target, 15% below its 52-week high, at 17x forward earnings: the cheapest of the three, with the most upside.
TIKR Tracks 106 Analysts Across Costco, American Express and Intuitive Surgical. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on all three stocks Alphinity just sold, along with Wall Street’s revenue and earnings estimates, side by side. Then decide for yourself which exit was right. More than 500,000 investors use TIKR to research stocks like this one. See the Analyst Ratings on All 3 Stocks
Wall Street cut Intuitive Surgical’s targets hard
Intuitive was the smallest sale: 334,585 shares worth $133 million, or 2.2% of the fund. It rose 7% between Sept. 30 and Nov. 2.
Third-quarter revenue rose 22% to $3.05 billion, but U.S. da Vinci procedure growth slowed to 10%, the slowest since COVID, according to a Wells Fargo analyst on the call. Intuitive also expects instrument and accessory revenue per procedure to fall 3% to 5% under new pricing, and it took a $450 million antitrust settlement charge.
Analysts’ average target fell from $593 to $483:
At 36x forward earnings, that’s still a lot to pay while U.S. growth slows and prices fall.
The Costco sale makes the most sense
The numbers back the Costco exit best: a premium multiple for slowing member growth, with 3% left to the Street’s target. American Express is the one I’d buy back, at less than half Costco’s multiple with a rising target, though its next reports need to show the job cuts paying off.
Costco’s first-quarter report, expected around Dec. 10, will be the first without a year-over-year boost from the 2024 membership fee increase. Alphinity’s next 13F lands in mid-February.
So what is Costco stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Costco could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
