Oppenheimer keeps Costco (COST +0.9%) slotted as a top pick after taking in the July sales report.
“We look very favorably upon the July sales results reported by COST. Top-line momentum continued into July with the company registering a comp increase (ex. FX and gas) of 15.7% in the US, which represents an acceleration in two-year comp trends to +21.0% from +18.9% in June with increasing strength in foods and hardlines. This is even with the ancillary business down in the mid-teens.”
The firm says the “catch up trade” now appears to have largely played out, but valuation is still not stretched on a relative basis in its view, at 1.63X NTM consensus forecasts.
The new price target from Oppy on Costco is $380. The firm isn’t in the majority in preferring Costco over Walmart. Beginning around the pandemic, analysts starting boosting their ratings on Walmart while leaving Costco relatively unchanged.