Goldman Sachs Reiterates Buy On Costco

Goldman Sachs reiterates its Buy rating on Costco

as it revisits its bullish thesis which is tracking to plan as fundamentals are improving and catalysts are more likely coming to fruition. BJ's announcement that it will be raising annual member fees and the California Board of Equalization's increase of the minimum level of non-taxable membership fees to $55 from $50 bode well for a fee increase at COST in 2011 – EPS accretion currently not factored into GS or consensus estimates. Goldman see opportunity for better sales driven by budding food inflation being passed through, MVM timing presents an opportunity in November, and CE trends improving; this coupled with disciplined cost control should deliver EPS upside on December 9. Goldman has a $70 PT on COST Costco is trading 1% lower at $66.58