ISI Group Reiterates Hold, $83 PT on Costco

ISI Group maintains its Hold rating and $83 target price on Costco

as the company drives traffic, comps and share. ISI Group says, "2Q results confirm Costco is driving trips, comps, and market share gains as its value offering to upper end consumers continues to gain share.  A 7% core comp, and 5%+ traffic is the best in our coverage, with a $3.5bn net cash position providing dry powder for buybacks, dividends, or faster unit growth. While Costco is winning trips in spades, 2 qtrs of core gross margin decay suggests member loyalty comes at a cost; namely price investment." COST closed at $86 a share yesterday.