Oppenheimer Raises Price target on Costco Wholesale (COST); Says Rewards Program Could Spur Membership Growth
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Oppenheimer reiterated an Outperform rating on Costco Wholesale (NASDAQ: COST), and raised the price target to $175.00 (from $160.00), following announced new rewards program. A day or so ago, COST made available details of its new co-branded credit card rewards program. Oppenheimer is optimistic that an enhanced credit card rewards program could ultimately spur better domestic membership growth at COST.
Analyst Brian Nagel commented, "For some time, we have looked very favorably upon longer term prospects for Costco and view the chain as representing one of the most powerful, well-run retailers in the world. On July 10, 2015 (at a price of $139.45), we lifted our rating on COST to Outperform, upon the opinion that a discounted valuation and percolating internal initiatives enhance the nearer term outlook for shares. COST recently divulged details of its new co-branded credit card rewards program. We studied this offer and come away even more upbeat upon the potential for COST’s new relationship with Citi (C) and Visa (V) to ultimately drive incremental membership and hence sales at the chain. Our 12-18 month price target on COST goes to $175 from $160."
Shares of Costco Wholesale closed at $157.60 yesterday.
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