Piper Jaffray Continues to Forecast Strong Results for Costco Wholesale (COST) Despite FX Headwinds

Piper Jaffray maintained an Overweight rating and $174.00 price target on Costco Wholesale (NASDAQ: COST) ahead of January results. The strong dollar continues to be a drag on reported results. Piper Jaffray estimates that FX negatively impacted comparable sales by 360bp in the month. However, Piper is forecasting continued strong results out of Costco in January with core comps likely in the range of 4% to 6%.

Analyst Sean Naughton commented, "We're forecasting continued strong results out of Costco in January with core comps
likely in the range of 4% to 6%. The strong dollar continues to be a drag on reported results; we estimate FX negatively impacted comparable sales by 360bp in the month. Gasoline price deflation has become less of an impact relative to prior months and likely represents just a 50bp headwind in January given easier year-over-year comparisons. Also, it is important to remember a later Super Bowl is expected to negatively impact January comps by 50bp. Altogether, we're expecting the reported number to be flat to up 2% in the month. We continue to favor Costco given its material pricing power, strong traffic trends and recurring revenue business model which we believes justifies the premium valuation, especially in this volatile market environment."

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 $151.12 yesterday.

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