UPDATE: Wells Fargo Upgrades Costco Wholesale (COST) to Overweight
Wells Fargo analyst Edward Kelly upgraded Costco Wholesale (NASDAQ: COST) from Equal Weight to Overweight with a price target of $370.00.
The analyst comments "We are upgrading COST to Overweight from Equal Weight, as the market's contempt for COVID beneciaries has created a compelling buying opportunity, in our view. Our call is based on the following: 1) The stock's return to pre-pandemic levels seems to imply that COST keeps none of the upside, which seems wrong to us. At least some share gains should be sticky given member growth, and emerging trends (working from home and de-urbanization) represent incremental positives. 2) The membership fee looks poised to increase in the next 18 months and represents a potential catalyst for sales and earnings. 3) The company's fundamental outlook overall remains bright, especially with the digital narrative improving. 4) Valuation is near multi-year lows relative to the market. We are raising our PT to $370 from $340 (35x our NTM EPS) and would use the recent weakness as a buying opportunity."
Shares of Costco Wholesale closed at $327.95 yesterday.
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