Guggenheim analyst John Heinbockel reiterated a Neutral rating and {REMOVEPT} price target on Costco Wholesale (NASDAQ: COST).

The analyst commented: "A flat-to-down trendline during the past year suggests valuation finally reaching a level that must be digested before outperformance can resume. As shown in Exhibit 1, a visual EBITDA PEG depiction across large-cap retail, the current 2x is the sector’s highest with a meaningful spread versus the next closest peers. The business possesses an industry-leading 10-12% growth algo powered by both a structurally superior value proposition and a model proven to travel globally. With 134 locations outside of North America, the growth runway may surpass a decade in duration, though unit expansion has been sub-par during the past two years. As a result, we stay NEUTRAL-rated and are still in search of an attractive entry point, which may likely be accelerated Asian expansion."

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Shares of Costco Wholesale closed at $922.77 yesterday.