UPDATE: J.P. Morgan Reiterates Overweight Rating, Raises PT on Costco Wholesale Corporation
In a report published Wednesday, J.P. Morgan & Co. reiterated its Overweight rating on Costco Wholesale Corporation (NASDAQ: COST), and slightly raised its price target from $100.00 to $101.00.
J.P. Morgan noted, “FX, gas and merchandise margin pressures looked set to peak, dissolving the bear case while traffic would remain consistent against the backdrop of accelerating MFI growth (clearing the way for potential earnings upside/multiple expansion). FX and gas dragged total comps down ~200 bps from May to July, but only ~40 bps in August. Looking ahead, on a combined basis, these could be a 20-140bp tailwind to comps through early 2013. With rising inflation representing a major investment theme and considering the potential SG&A leverage from higher sales offsetting COST's price investment philosophy, the company continues to be positioned well into 2013 (even beyond its merchandising prowess). Finally, we expect store growth to accelerate given efforts in Canada and Mexico.”
Costco Wholesale Corporation closed on Tuesday at $98.15.
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Tags: J.P. Morgan & Co.