Costco comps stronger for third consecutive month, says DA Davidson

DA Davidson analyst Michael Baker keeps a Neutral rating and $570 price target on Costco after its September sales data. The company’s total comps strengthened for the third month of acceleration in a row after negative prints in May and June, and higher gas prices helped comps by 0.5% compared to being a 0.3% drag in August, as gas price inflation may be coming back to the table, the analyst tells investors in a research note. The firm adds however that with the stock trading at 36.5-times expected next-12-month earnings, it prefers to wait for a better entry point.