Costco Wholesale (COST): Membership Fee Increase Drives EPS raise - BMO
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BMO Capital analyst, Kelly Bania, reiterated her Outperform rating on shares of Costco Wholesale (NASDAQ: COST) after the company reported F4Q16 EPS of $1.77, slightly better than expected at first glance but in line considering a $0.04 tax benefit. The analyst thinks this will be well received given the volatile food deflation backdrop.
Costco also announced it is raising key International membership fees by 10%, and the analyst believes that a U.S./Canada fee hike remains a possibility in early/mid-2017. Benefits from the credit card transition are starting to accrue which would be another positive for the company.
The analyst raised EPS modestly due to the membership fee increase.
No change to the price target of $180.
Shares of Costco Wholesale closed at $147.49 yesterday.
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