Costco Wholesale (NASDAQ:COST) stock keeps climbing, and Wall Street's calling shotgun. Simeon Gutman at Morgan Stanley became the latest analyst to boost the warehouse club operator's price target. He is lifting his goal on the shares to $400 from $360. Naturally he is sticking with his earlier bullish rating on Costco.

Gutman's rosier outlook for the stock is supported by his higher near-term estimates reflected by recent encouraging trends. There's a lot to like at Costco these days, but the unspoken catalyst for the move is that shares of Costco have closed above $360 in all but one trading day over the past five weeks. It would be odd for an analyst to remain bullish on a stock with a lower price target than where it's actually trading. 

The new update may not seem to offer much in near-term upside. The $400 milestone is one that Costco has never vanquished -- it was just 7% away from that mark as of Wednesday's close. Let's go over some of the reasons why Costco is heading to $400 soon -- and likely much higher shortly after that. 

A woman wears a mask and picks out groceries.

Image source: Getty Images.

1. Gutman isn't alone at $400

Let's start by pointing out that Morgan Stanley's analyst isn't exactly planting the flag at $400 this week. RBC Capital, Baird, Barclays, Loop Capital, J.P. Morgan, and Oppenheimer have all established price targets at $400 or higher since September. Last month we had Jefferies analyst Stephanie Wissink upgrade the stock with a Street-high price target of $435. 

Having at least eight Wall Street pros perched at near-term share price goals of $400 or better doesn't guarantee it will happen, of course. However, the market consensus with many analysts revising their targets higher does suggest that it will keep inching higher in the coming months.

2. Costco has gotten better during the pandemic

Gutman's more optimistic take at the stock's near-term prospects for appreciation comes after having virtual meetings with executives at Morgan Stanley's Life After COVID conference. He feels the chain will emerge out of the COVID-19 crisis in better shape than it was in its pre-pandemic state, but that's also not exactly breaking news.

Costco made the most of its ability to stay open during the early phases of the pandemic. It was an essential retailer, after all. However, its ability to never close has given it a leg up competing against more conventional retailers that haven't hit the ground running. 

The warehouse club giant is killing it in the new normal. Adjusted comps skyrocketed 14.1% in the fiscal fourth quarter that ended in August. It's not a fluke. Comps have gone on rise 15.5% in September and 14.4% in October.

3. We aren't close to hitting peak Costco

The latest financial results out of Costco have been spectacular, but even with double-digit comps in recent months this is a retail stock that isn't hitting on all cylinders. The gas pumps outside of its stores are lonelier than they were a year ago because we're still not driving as much as we used to. There are travel booking centers inside Costco's massive warehouse clubs that naturally aren't booking as many vacations as they were in the past. The stores are generating strong in-store traffic, but there are still people out there hesitant to frequent Costco in person as often as they did in the pre-COVID-19 days. Even the iconic in-club food offerings are likely suffering from some shoppers hesitant to eat out or even consider takeout orders. 

All of this is actually great news for Costco shareholders. There are more levers to play in this recovery. Some aspects of the business may cool down once things are back to normal. You're not going to see digital sales doubling every year the way they are now, but it will be a potent incremental contributor once things are somewhat back to normal. 

Costco hitting $400 isn't going to be a surprise. The way that momentum keeps improving for Costco these past few months, even hitting $500 at some point in 2021 wouldn't be a shock either. Costco gets it, and investors know that $400 will be more of a pit stop than a finish line.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.