Stock Of The Day: Analysts Weigh In On Costco Following Stellar Q2 '15
TipRanks | Mar 08, 2015 09:36AM ET
By Carly Forster
Wholesale retailer Costco (NASDAQ: Oliver Chen maintained an Outperform rating on Costco with a $165 price target following the company’s stellar Q2 results. He noted:
“We believe Costco is well positioned to continue delivering double-digit earnings growth over the near to medium term driven by square footage growth, steady membership revenue growth and positive same-store sales comps. Costco's higher income customer base (average household income of approximately $96,000) is faring better economically than low- to middle-income consumers, who continue to struggle with wage growth. We believe superb price/value, luxury product and streamlined assortment helps drive a sustainable high-margin membership stream."
Michael Lasser issued a Hold rating on Costco with a price target of $153. He reasoned:
“With MFI coming in slightly below UBS and the Street, COST again beat expectations by a comfortable margin on retail operations. Excluding MFI, COST's operating income was $295 mm, 30 percent ahead of our estimate of $227 mm due to the gross margin beat. GM was the highest it has been since 1Q'11. We think it likely continued to benefit from lower fuel prices and the resulting impact on mix, as well as from COST's ability to keep a bit more of the margin on fuel.”
TipRanks is Hold.
Disclosure: All Costco recommendations sourced from TipRanks.
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