UBS Reiterates Buy Ahead of Costco Wholesale's (COST) 4Q Report

September 23, 2016 9:02 AM EDT
Get Alerts COST Hot Sheet
Price: $157.59 +2.43%

Rating Summary:
    18 Buy, 11 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 21 | Down: 18 | New: 19
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UBS reiterated a Buy rating and $180.00 price target on Costco Wholesale (NASDAQ: COST) ahead of the company's 4Q earnings report.

Analyst Michael Lasser commented, "Given all of the controversy over COST, having a chance to hear from management should provide a chance for the market to be reassured. Plus, it also gives an opportunity to hear how significant some of its long-term drivers are. Its old mainstays like MFI should be stable. Further, COST generated 2%+ traffic growth, suggesting that its membership renewals likely remained strong (we est. 90.5% in the US & Canada). This is what drives our MFI est. of $840 mm, which is ahead of the cons. of $835 mm. Also, COST's MFI should benefit from a higher % of stores opening in countries offering Exec. Memberships (TTM of ~83% vs. ~74% a year ago). Plus, moderating FX pressures should help (we est. -70 bps vs. -120 bps in 3Q'16 & -380 bps in 4Q'15). Seeing solid gains in this metric should be a sign to the market that COST is poised to raise its membership fees, which will be a positive for it shares."

For an analyst ratings summary and ratings history on Costco Wholesale click here. For more ratings news on Costco Wholesale click here.

Shares of Costco Wholesale closed at $153.15 yesterday.



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