Mizuho Upgrades Costco Wholesale (COST) to Outperform, Adding to Top Picks

Mizuho analyst David Bellinger upgraded Costco Wholesale (NASDAQ: COST) from Neutral to Outperform with a price target of $1,000.00 (from $950.00).

The analyst comments "We’re upgrading Costco (COST) to Outperform and raising our PT to $1,000. Shares have corrected ~20% on concerns that both membership and comp sales growth are slowing as part of some underlying change within the COST model. We push back with: 1) A proprietary store-level analysis indicating roughly half of recent U.S. warehouse openings are "fill-ins," siphoning demand from high-volume locations and therefore temporarily weighing on membership growth; 2) Trade-up activity is accelerating with Q1 premium member adds 2-3x that of total membership; 3) Domestic renewal rates remain exceptionally high at >90% and above the 10-year running average. Our call may be early. Comparisons over each of the next 3-5 months are incredibly difficult. In our view, +HSD% top-line growth is durable - and coupled with wage/OpEx growth easing - makes for a rare and compelling set-up. Adding to Top Picks."

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 $854.50 yesterday.

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