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Barclays Maintains an 'Equalweight' on Costco Wholesale (COST); Blueberry prices up 60%; Grapes 20%

December 9, 2011 2:59 PM EST
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Price: $733.97 +0.26%

Rating Summary:
    23 Buy, 14 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 10
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Barclays maintains an 'Equalweight' on Costco Wholesale (NASDAQ: COST) price target of $85.00.

Barclays analyst says, "Costco reported 1Q12 adjusted EPS of $0.80, in line with our estimate of $0.80. Sales increased 12.5% to $21.2 B. Comps increased 10% in the quarter, including a 6% increase in average transaction and a 4% increase in frequency. Excluding the positive impact from gasoline and FX, comps would have been up 7%. Membership fee and other income increased 7.5% to $447 mm, benefiting from a 15% increase in new member sign ups, continued solid renewal rates of 89.2% in the U.S. and Canada and 85.4% worldwide."

"Gross margin decreased (35) basis points to 10.62%. Excluding gasoline, core merchandise margins were down (10) bps, negatively affected by the company's focus on top line growth going into the holiday season with aggressive pricing and higher inventory levels (+11.2%). Inflation is expected to continue y/y in fresh food, food & sundries, and jewelry but is expected to increase at a slower rate than it has in the last six months...We are maintaining our FY12 and FY13 estimates of $3.90 and $4.50, respectively.

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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