Jefferies Raises Price Target on Costco Wholesale (COST), Calls Stock Overpriced

Jefferies is reaffirming its Hold Costco Wholesale (NASDAQ: COST) and is increasing its price target from $74 to $77.

The firm notes its below consensus FY12 EPS estimate, which is $3.61 compared to $3.87, reflects 5 percent comps for the second half along with weaker margins as management uses additional promotions to increase comps.

With shares currently trading at 22 times the Street's FY12 EPS estimate, Jefferies believes should have some room to fall slightly. An analyst at the firm comments, "While we are big fans of Costco, we think risk/reward is less appealing as profits soften and we potentially head into a period of slower consumer spending."

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 $85.76 yesterday.

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