Costco Reaches New High - Analyst Blog

By
A A A

Shares of Costco Wholesale Corporation ( COST ) recorded a new 52-week high of $108.35 yesterday, before closing at $107.83, rising approximately 35.2% in a year's span. Based on the current price, Costco is 1.6% above the Zacks Consensus average analyst price target of $106.11.

Moreover, it currently trades at a forward P/E of 23.7x, a 41.9% premium to the peer group average of 16.7x. Additionally, the company's long-term estimated EPS growth rate is 13.2%, higher than the peer group average of 12.7%.

We believe Costco's differentiated product range enables it to provide an upscale shopping experience to its members, resulting in market share gains and higher sales per square foot. Moreover, it maintains a healthy membership renewal rate.

Costco remains committed to opening new clubs in domestic and international markets. The company's diversification strategy is a natural hedge against risks that may arise in specific markets.

This is evident from Costco's healthy comparable-store sales results, when most of the retailers were struggling against the challenging macroeconomic factors including higher taxes and a soft employment scenario along with unfavorable weather conditions that restrained consumers from spending.

Costco delivered comps growth of 4% in March, reflecting comparable sales growth of 5% at its U.S. locations and 2% at international outlets.

Retailers like The Cato Corporation ( CATO ), Gap Inc. ( GPS ) and The TJX Companies, Inc . ( TJX ) witnessed comps decline of 11%, 1% and 2%, respectively during this period.

Currently, shares of Costco carry a favorable Zacks Rank #2 (Buy).



CATO CORP A (CATO): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

TJX COS INC NEW (TJX): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CATO , COST , GPS , TJX

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Author Roger Martin LIVE
Author Roger Martin LIVE            

Stocks

Referenced

Most Active by Volume

139,392,686
  • $5.41 ▼ 18.52%
108,086,733
  • $17.04 ▲ 1.61%
88,411,032
  • $42.085 ▼ 1.19%
35,897,863
  • $101.79 ▲ 0.21%
34,635,836
  • $46.68 ▲ 0.34%
31,162,075
  • $4.36 ▲ 12.37%
31,086,421
  • $26.21 ▲ 0.61%
30,930,862
  • $17.09 ▼ 2.95%
As of 9/18/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com