Costco Wholesale (COST): Pullback Is Buying Opportunity - Cowen
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Cowen analyst, Oliver Chen, reiterated his Outperform rating on shares of Costco Wholesale (NASDAQ: COST) and believes that COST is a top un-Amazonable picks and the recent stock pullback post-August comp miss is a buying opportunity. COST reports EPS on Thursday, 9/29 (AMC).
The analyst anticipates a meet or beat quarter for EPS. He is expecting 4Q revenues of $35.7bn, up +2% from $35.0bn last year with 4Q overall comps of flat y/y (+3% ex. gas & F/X) driven by: U.S. core comps at flat y/y (+2% ex. gas & F/X); Canada comps up +2% (+5% ex. gas & F/X); and other international comps down -2% (up +1% ex. gas & F/X). For 4Q, we model gross margin up +17bps to 11.31% (vs. Street's 11.29%), and op margin at 3.31% (vs. Street's 3.26%), yielding 4Q EPS of $1.75E slightly ahead of Street's $1.73E.
No change to the price target of $170.
Shares of Costco Wholesale closed at $152.53 yesterday.
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