After Initial Speedbump, Costco Wholesale (COST) New CC Is Gaining Traction - Oppenheimer
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Oppenheimer analyst, Brian Nagel, reiterated his Outperform rating on Costco Wholesale (NASDAQ: COST). In late June, the analyst published a short comment and pointed out that “initial conversion/sign-up snafus” with the new Costco card likely weighed somewhat upon the abilities of cardholder-members to spend in COST stores. These issues seem to be abating quickly. Recent data/commentary from Citi suggests initial and meaningful success with the new COST card program. Per C commentary, in the first 3.5 weeks since the launch of the new Costco card, new card sign-ups topped expectations at 337K, and purchases on the card totaled $5.7B, including about two thirds transacted outside COST stores.
Initial data is limited but since the launch of the new Costco-branded credit card, sign-ups have tracked as much as 250K-290K higher than prior run rates, when Costco was partnered with American Express (AXP). The bottom line is that new and existing members seem to be embracing COST's new co-branded credit card offer. COST will announce July sales on Aug. 3rd.
No change to the price target of $175.
Shares of Costco Wholesale closed at $168.12 yesterday.
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