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Investing.com — Costco (NASDAQ:COST)’s results beat estimates big-time, but that wasn’t enough to satisfy investors. Analysts, on the other, seem pretty pleased.
Shares are down 3% on Friday even as Deutsche Bank (DE:DBKGn) to Morgan Stanley (NYSE:MS) raised their price targets on the big box membership retailer.
Costco reported earnings per share of $3.51 versus the estimated $2.83, on sales of $53.4 billion compared to the expected $52 billion, according to data compiled by Investing.com. The fourth quarter was negatively impacted by incremental expenses related to Covid-19 premium wages and sanitation costs of $281 million pretax.
Nonetheless, Morgan Stanley analyst Simeon Gutman raised the price target on Costco to $360 from $330, reiterating an overweight rating, according to StreetInsider. The shares are currently trading around $336.
“The stock screens favorably relative to the broader market (currently trades at a ~1.6x premium to the SPX vs. ~2x historically), presenting a reasonable entry point for longer-term oriented investors,” Gutman said. “We expect the stock to steadily grind higher with top-line strength set to continue in the near-term amidst manageable compares, alongside a favorable skew of earnings outcomes regardless of the macro/virus backdrop.”
BMO Capital analyst Kelly Bania raised the price target to $385 from $340 and maintained an outperform, saying the company is still benefiting from strong membership renewals.
RBC Capital raised the price target to $412 from $400, and Deutsche Bank upped it to $305 from $302.
