Mizuho Starts Costco Wholesale (COST) at Neutral

Mizuho analyst David Bellinger initiates coverage on Costco Wholesale (NASDAQ: COST) with a Neutral rating and a price target of $975.00.

The analyst comments "We launch coverage of Costco (COST) with a Neutral rating and $975 PT. Underlying fundamentals for the warehouse operator have been and continue to be nothing short of stellar, in our view. Senior leadership is also taking the company in somewhat of a new direction with significant opportunities in: 1) An early and developing ads business; 2) Extended runway for international unit growth; 3) Expansion of digital initiatives including the Costco Next marketplace, driving +20% eCommerce growth. For these reasons, COST is a crowded long and core holding with tariff insulation. We question whether upside from these initiatives will flow directly to the bottom line or in quintessential COST fashion, be reinvested back into the member experience. Despite nearly a 10% pullback since mid-February, shares are trading near 50x forward earnings and appear full. We opt to show some valuation discipline and await a more opportune entry point."

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 $964.31 yesterday.

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