Costco Wholesale (COST): "Slightly More Cautious" On August Comps - Nomura
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Nomura Securities analyst, Jessica Schoen Mace, reiterated her Buy rating on shares of Costco Wholesale (NASDAQ: COST) ahead of August sales results on Wednesday, August 31, at 9pm ET. The analyst is comfortable with underlying trends at the company, but she took this opportunity to slightly lower the 4Q16 comp estimate from 1.0% to 0.0% given the company’s somewhat soft sales result in July as well as read-throughs from recent retail earnings results.
The analyst is looking for comp sales in August of ~1%, including a U.S. comp ex-gas of 3–5%. In conjunction with reported comp sales in June and July of 0.0% and (2.0%). For the quarter, overall company comp should come in at 0.0% and the analyst is cutting the 4Q16 EPS estimate to $1.75 from $1.79.
The analyst stated "we take a slightly more cautious stance heading into 4Q results given the generally pressured traffic trends we have seen across the broader retail landscape this quarter, largely stemming from the highly competitive environment and the shift to online".
No change to the price target of $185.00
Shares of Costco Wholesale closed at $167.36 yesterday.
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