Piper Jaffray Reiterates Overweight, $97 Target on Costco
Piper Jaffray reiterates its Overweight rating and $97 target price on Costco (NASDAQ: COST) on higher gas prices and impressive transaction trends.
Piper Jaffray says, "Over the years, Costco's stock has traded similarly to the price of gas given it generates nearly 10% of its revenue from gasoline. While we believe there is a lot more to the Costco story, an increased discussion around higher gas prices will likely be positive for shares, in our view. We continue to favor the name given strong transaction trends, international growth, high quality products, and strong returns on capital. We believe the risk/reward on shares remains favorable given the unfavorable weather trends in February last year which could lead to upside in revenue estimates."
COST closed at $84.47 a share on Friday.
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