Boutique investment bank Oppenheimer (OPY) has named Costco Wholesale’s (COST) stock a “top pick” ahead of the upcoming year-end holidays.
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Analysts at Oppenheimer cite the retailer’s attractive valuation, strong competitive position, and resilience as reasons to be bullish on the stock. The analysts single out the valuation of COST stock after its share price has declined nearly 15% since February of this year.
Oppenheimer said Costco’s stock currently presents a “superior value proposition” and is likely to outperform during the current quarter that includes the busy year-end holiday shopping season. The analysts also note that Costco attracts an “affluent customer.”
Price Target
Despite naming COST stock a “top pick,” Oppenheimer lowered its price target on the shares to $1,050 from $1,130, reflecting the downturn in the share price in recent months and a general re-rating of stocks in the consumer space.
Oppenheimer stresses that Costco is “well-positioned for the holiday season,” citing strong in-store products for sale and an expected pick-up in customer traffic and same-store sales during the current quarter. The investment bank also notes long-term catalysts for Costco, including the possibility of a stock split or special dividend.
Is COST Stock a Buy?
The stock of Costco Wholesale has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 16 Buy and nine Hold recommendations issued in the last three months. The average COST price target of $1,091.74 implies 19.33% upside from current levels.
