Costco Wholesale (COST): Patience Brings Rewards - UBS
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UBS analyst, Michael Lasser, reiterated his Buy rating on Costco Wholesale (NASDAQ: COST) after the company reported earnings. The quarter was largely in-line with expectations, which should be met with relief as the market feared there would be downside. A lower than expected tax rate contributed ~$0.05 to the 4Q EPS but most of the key measures were as anticipated.
MFI of $832 mm met the consensus forecast. The underlying metrics remained healthy & consistent as the company saw a 7% overall increase in members, driven by an 87.6% renewal rate worldwide. Online sales growth remained solid at 12% even as it decelerated slightly on a tougher compare.
The company provided indications its reported comps should accelerate in the coming periods as deflation in categories like proteins fades & the loss of tobacco sales become less of a factor.
No change to the price target of $180.
Shares of Costco Wholesale closed at $147.49 yesterday.
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