Buy Costco (COST) on Weakness – Morgan Stanley
Morgan Stanley reiterated an Overweight rating and $179.00 price target on Costco Wholesale (NASDAQ: COST). The stock is now 6% off of its recent highs, the business is performing well and Morgan Stanley thinks that Q1 results may have been misunderstood. On the surface, membership income missed consensus by $10 million suggesting there are cracks to this sacred business driver. In reality, after adjusting for FX, COST beat MFI estimates by $14 million.
Analyst Simeon Gutman commented, "COST may have been overheated heading into FQ1 results. But, today's -5% reaction seems overdone. Earnings quality and underlying performance consistent with prior results and 2016 catalysts await."
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 $159.72 yesterday.