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Costco Back To Top Pick Status At Oppenheimer Amidst Positive Retail Projections

Benzinga ·  Jun 6, 2023 01:59
    • Oppenheimer analyst Rupesh Parikh reiterated an Outperform rating on the shares of Costco Wholesale Corporation (NASDAQ:COST) and raised the price target from $550 to $575.
    • The analyst added back Costco to top pick status after removing it from the list in November on concerns over aggressive Street forecasts and lingering discretionary big-ticket headwinds.
    • Given the pullback in shares since then, the company's better-than-expected delivery of bottom-line profitability on a sub 4% comparable sales, and more muted buyside N-T comp expectations, the analyst sees an improved nearer-term outlook for outperformance.
    • The improvement includes potential money flows amidst challenges at many discretionary retailers lately, added the analyst.
    • In the analyst's view, a membership fee increase and a special dividend still likely represent potential positive catalysts down the road.
    • U.S. adjusted comparable sales increased 1.7% in May with four-year adjusted U.S. comparable trends at 36.1% versus +35.9% in April and +37.0% in March.
    • The analyst moves even more defensive with the top pick ranking in an increasingly difficult U.S. retail backdrop
    • The updated top picks include Church & Dwight Co Inc (NYSE:CHD), Chewy Inc (NYSE:CHWY), COST, Prestige Consumer Healthcare Inc. (NYSE:PBH), Ulta Beauty Inc (NASDAQ:ULTA), and Walmart Inc (NYSE:WMT).
    • Price Action: COST shares are trading higher by 0.79% at $516.62 on the last check Monday.
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