The Costco share can continue to accumulate as a sales start, analyst says
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Costco Wholesale
stock hit another record high Friday, and Robert W. Baird says the rally may continue to roll because a report of the same store sale due out next week will likely show a rebound.
Bakhistorie .
Costco
(ticker: COST) has jumped nearly 21% since the beginning of the year and has now exceeded the market and has risen nearly 34% over the past 12 months. As we have mentioned before, the stock has been a strong and stable gain, not only in recent years, but in the longer term, as consumers flock to the value dividend, both in stores and online, so that the company boasts a subscription renewal on around 90%.
Costco is not perfect, and the rally has meant that someone is nervous about the stock's valuation despite its history of giving a prize. Nevertheless, the chain has long been a bright place in the rugged store area.
The results are strong, and analysts like the shares. Some insiders have also stood up for the shares, even though others are making a profit.
What's new? .
Costco
is one of the few retailers that still provide monthly comparable sales figures, and this is due to report monthly the same store sales on Wednesday. This year's reporting period, which extends over the five weeks to and including April 7, contains a day than last year, because Easter came on April 1, 2018.
Bairds Peter Benedict repeated an Outperform assessment and $ 250 prizes on Friday's shares, writes he expects sales to have risen last year after a tough February. He estimates the March core comparable store sales will increase by 7% to 8%. On a reported basis, which includes the impact of variable factors such as fuel sales and exchange rates, the increase will be 6% to 5, he says.
Looking ahead . "We continue to believe in Costa's established low-cost position on quality products, loyal / clear membership bases, and the new omnichannel relevance position the company to effectively compete and take market share from retail high-cost channels," concludes Benedict. And while stock valuation rises above historical levels, he argues that investors continue to be willing to pay for a consumer stapler that delivers growth – a rarity.
Barrons has claimed much the same. Costco has long ordered a higher number than its peers because the subscription model makes revenue more predictable than other retailers. It has become even more valuable as e-commerce and changing shopping habits have worn the sector.
Despite the grandiose picture, Costco attracts important thousands of buyers, it has little debt, expands overseas, and is at the top of consumer demand for convenience.
The stock chart speaks volumes. Over the past decade, the Costco share is up 406% while
SPDR S & P Retail ETF
(XRT) has increased 230%, just a hair under
S & P 500 s
231% gain, according to FactSet data.
Costco was up 0.6% to $ 245.92 in afternoon shopping.
Write to Teresa Rivas at teresa.rivas@barrons.com
