UPDATE: Citigroup Reiterates Costco Wholesale at Neutral on 10-Q Takeaways
Citigroup maintained its Neutral rating and $100 price target on Costco Wholesale (NASDAQ: COST) following the release of the company's 10-Q filing.
Citigroup said, "COST's F1Q13 EPS of $0.95 were two pennies ahead of our estimate and consensus. The company benefited from a strong MFI increase as a result of its November 2011 fee increase. However, operating margins were disappointing due to a decrease in core merchandising margins and incremental expenses associated with COST's technology modernization investments. Looking ahead, we are more cautious on COST's margin outlook in light of potential food inflation in 2013 and technology investments. Over time, new club openings, especially internationally, should drive topline and margins."
Costco Wholesale closed at $98.68 on Thursday.
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