[ad_1]
Text size
Not credited
Costco
The wholesale stock (COST) started on Friday, helped by an upgrade of Gordon Haskett, which sees several catalysts for the discount retailer, including pending profits that could surprise upward.
The history of return. The Costco stock is up more than 41% since the beginning of the year, while the S & P 500 index has climbed 20%. The company is expanding abroad and is seeing strong sales trends. Many expect it to pay soon a special dividend.
This has allowed actions to largely avoid the pressures on their peers, including an ongoing trade war and increasing competition from e-commerce.
What's up. Friday, analyst Gordon Haskett Chuck Grom strengthened its rating on Costco at Hold's Accumulate, raising its price target from $ 255 to $ 330.
He writes that the upgrade comes after a meeting with Costco's chief financial officer and his recent research, which – with a recent setback in equities – leads him to believe that "current levels [are] a reasonable entry point to get closer to one of our favorite retail models.
Look to the front. Grom also raised its earnings per share estimate for the fourth quarter of the fiscal year from $ 2.66 to $ 2.57, or $ 2.54 more than the consensus, as Street underestimated the strength of the business. Costco base in the October report.
However, he also believes that the company is taking long-term strategic steps, as "Costco is finally committed to personalization to engage more with its existing clientele," a strategy that looks far ahead, given high customer loyalty rates. .
In addition, he notes that markets have been more willing to reward the retail giants with structural benefits this year, including
Walmart
(WMT), target (TGT) and
Home Depot
(HD) – Turnaround stories, with Costco in the old category.
Costco's consistent profits have made it a remarkable product over the years, with a model that has been widely acclaimed by most analysts. However, valuation remains a subject of contention.
For Grom and others, stocks are not overpriced, but some have argued that even for a long-held premium, Costco looks costly. Friday saw John Heinbockel from Guggenheim expects a better than expected end result for the Costco quarter, but reiterated a neutral rating of the shares "solely for valuation reasons".
Costco is up 0.4% to $ 288.87 in recent trading.
Write to Teresa Rivas at [email protected].
[ad_2]
Source link