Piper Jaffray Upgrades Costco Wholesale (COST) to Overweight; Expect Material Acceleration in EPS Growth in F10
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Piper Jaffray & Co. upgrades Costco Wholesale (Nasdaq: COST) to Overweight. Price target raised to $62.
Piper analyst says, "We are upgrading shares to Overweight based on our belief that both sales and EPS growth will accelerate in F10. For sales, we expect the combination of improving discretionary sales, California sales stabilizing, waning headwinds from deflation, and the impacts from gas and F/X turning from headwinds into comp tailwinds that will drive sales growth of 10% (slightly above historic levels). For EPS, we expect stable gross margin, leverage of SG&A, and a slight F/X tailwind to drive EPS growth of 17% (above this historic 10%-12% growth rate). We are increasing our F10 EPS estimate to $2.92. Last, we note COST shares (despite the jump today) remain reasonably valued given the historic premium to the S&P 500 earnings multiple of 1.3x."
To see more analyst ratings on COST Click Here.
Costco Wholesale Corporation (Costco) operates membership warehouses-based offering its members products in a range of merchandise categories.
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