UBS analyst Michael Lasser maintained a Buy rating on Costco today and set a price target of $1,205.00.
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Michael Lasser has given his Buy rating due to a combination of factors that highlight Costco’s operational strengths and growth potential. One of the key reasons is the company’s ability to enhance sales through extended club hours, which has contributed significantly to weekly sales without causing additional cost burdens. This operational efficiency is further supported by the implementation of technology like ‘line busting,’ which improves the checkout process and enhances customer experience. These initiatives demonstrate Costco’s flexibility and commitment to improving member satisfaction in a cost-effective manner.
Despite a slight decline in membership renewal rates, which dropped by 40 basis points, Costco has managed to maintain growth in its membership fee income, surpassing market expectations. The decline is partly attributed to the lower renewal rates of members acquired through digital channels and promotions. Nonetheless, the overall membership count has increased, and the company continues to benefit from a previous membership fee increase. These factors, combined with a consistent increase in key performance indicators, underpin Lasser’s positive outlook on Costco’s stock.
According to TipRanks, Lasser is a 5-star analyst with an average return of 13.9% and a 67.07% success rate. Lasser covers the Consumer Cyclical sector, focusing on stocks such as Dick’s Sporting Goods, Floor & Decor Holdings, and Five Below.
In another report released today, Morgan Stanley also reiterated a Buy rating on the stock with a $1,130.00 price target.