Piper Jaffray Maintains Overweight, $97 Target on Costco

Piper Jaffray reiterates its Overweight rating and $97 price target on Costco

as the company looks for continued traffic growth. Piper Jaffray notes, "We are estimating a Jan reported comp result between 5.5% and 6.5% vs. the consensus mean of +5.8%. We are assuming a core merchandising comp between 6.0% and 6.5% with F/X, gas and cannibalization weighing on the reported figure by about 60bps. However, there could be some upside to these estimates as weather negatively impacted sales trends by 100 to 150bps in January last year, which could leave our estimates conservative given favorable weather this year. We continue to believe COST shares represent a good risk/reward at current levels given the company is generating mid-single-digit transaction growth and generating strong ROIC." COST closed at $81.62 a share on Friday.