Baird Recommends Investors Fill Their Carts With Costco Following Recent Pullback

Baird Equity Research maintains an Outperform rating with a price target of $175 for Costco Wholesale Corporation COST on Friday and trimmed its fourth-quarter EPS estimate from $1.73 to $1.69.

“While the retail backdrop seems to have slowed,” explained Baird senior analyst Peter Benedict, “ we see prospects for better traffic/sales later this year as compares start to ease and members increasingly recognize the benefits of the new co-branded Visa card.”

Benedict took a potential increased U.S./Canadian fee during 2017 into account for his $175 price target, as well as a possible special dividend from the membership-based retailer.

“While we are trimming estimates,” stated Benedict, “COST's compelling value proposition and loyal/"sticky" membership model remain durable positives in today's challenging retail world.”

At time of writing, Costco was down 0.21 percent on Friday at $152.83.

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