Piper Jaffray Raises Price Target Ahead of Costco Wholesale (COST) October Comps

Piper Jaffray reiterated an Overweight rating on Costco Wholesale (NASDAQ: COST), and raised the price target to $168.00 (from $155.00), ahead of October comps. Analyst Sean Naughton estimates core comps up 5 to 7% and reported results (2%) to flat. Consistently strong traffic trends which have averaged north of 4% over the past five years probably drives another solid month for Costco in Piper Jaffray's view.

Naughton commented, "For October, we estimate core comps up 5 to 7% and reported results (2%) to flat. The strong dollar and gas price deflation continue to mask core results albeit to a lesser degree in October by our estimates. We estimate FX and gas had a combined 7ppt negative impact on comps, an improvement from 825bp in September. Costco shares trade just above historical valuation relative to the S&P 500 at 1.7x P/E NTM, but we believe consistently strong results, a recurring revenue mode and several catalysts on the horizon including a potential MFI increase and the credit card change should continue to demand a premium in the market. We raise our price target to $168 from $155."

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 $158.12 yesterday.

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