Deutsche Bank Starts Costco Wholesale (COST) at Buy, Comps Remain Strong Through 2013
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Price: $961.10 -0.08%
Rating Summary:
27 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
27 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Deutsche Bank initiates coverage on shares of Costco Wholesale (NASDAQ: COST) with a Buy rating and $89 price target.
Within its "Double Barbell Investment Strategy," the firm places Costco on the Buy side of its Low Beta portfolio.
The company's core comps have averaged 6.2 percent over the past few years and the firm believes that they will continue to remain strong throughout 2013.
Over the next two years, the firm believes that the company will gain an additional $0.14 per share from increasing its Gold membership fee from $50 to $55.
An analyst at Deutsche comments, "we do think that Mr. Jelinek will adopt a modestly looser approach to the company’s current 14% ceiling on merchandise margins and allow the company to “earn more” down the road. Importantly, we think the change will be subtle, but with margins under 3.0% on roughly $100 billion of sales volume, a little flexibility will go a long way."
For the fourth quarter and 2011, the firm estimates EPS of $1.10 and $3.32. For 2012 they estimate EPS of $3.95.
For more ratings news on Costco Wholesale click here and for the rating history of Costco Wholesale click here.
Shares of Costco Wholesale closed at $80.71 yesterday.
Within its "Double Barbell Investment Strategy," the firm places Costco on the Buy side of its Low Beta portfolio.
The company's core comps have averaged 6.2 percent over the past few years and the firm believes that they will continue to remain strong throughout 2013.
Over the next two years, the firm believes that the company will gain an additional $0.14 per share from increasing its Gold membership fee from $50 to $55.
An analyst at Deutsche comments, "we do think that Mr. Jelinek will adopt a modestly looser approach to the company’s current 14% ceiling on merchandise margins and allow the company to “earn more” down the road. Importantly, we think the change will be subtle, but with margins under 3.0% on roughly $100 billion of sales volume, a little flexibility will go a long way."
For the fourth quarter and 2011, the firm estimates EPS of $1.10 and $3.32. For 2012 they estimate EPS of $3.95.
For more ratings news on Costco Wholesale click here and for the rating history of Costco Wholesale click here.
Shares of Costco Wholesale closed at $80.71 yesterday.
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