Piper Jaffray Reiterates Overweight on Costco Wholesale (COST) Ahead of April Sales Results

Piper Jaffray reiterated an Overweight rating and $173.00 price target on Costco Wholesale (NASDAQ: COST) ahead of april sales results. Piper Jaffray believes that core comparable sales were up 4%-6%, relatively in line with the two-year stack trend of 10.6%. Also, foreign exchange is estimated to be a 100bp drag on the comparable sales growth, an improvement from 135bp in March and the TTM average of 350bp, primarily driven by the rally in the Canadian dollar. COST is scheduled to report results on Wednesday.

Analyst Sean Naughton commented, "Ahead of April sales results set for release this Wednesday, we continue to recommend Costco shares as valuation has improved relative to other consumers staples and we believe there are catalysts on the horizon to drive earnings estimates higher. For the month of April, we are projecting core comps up 4%-6% with the midpoint in line with the twoyear stack trend. Gas deflation and foreign exchange are expected to have a 240bp impact in aggregate by our estimates, putting reported figures closer to a little under 2%-4%. Bottom line, we continue to recommend Costco shares, particularly given the improved valuation relative to other consumer staples and the upside from the tender change and potential membership fee increase."

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 $148.13 yesterday.

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