- Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Costco Wholesale Corp (NASDAQ:COST) with a price target of $590.00.
- The analyst estimates total comparable sales for October to be 4.3% versus 17.5% last year.
- Feldman said the company’s October sales should benefit from high food and overall inflation, which pushes consumers to the store in search for value.
- It will also likely benefit from an early start to the holiday season, with special deals online along with elevated fuel prices.
- Meanwhile, the analyst added that the softness across discretionary products and elevated promotions related to high inventory levels across retail will partly offset the favorable conditions.
- The strength of the U.S. dollar also should weigh on results.
- Feldman expects October traffic to be up 2.0% and average ticket to be up 2.3%, partly helped by inflation.
- The analyst sees Food & Sundries and Fresh Foods to outperform, helped by increased at-home consumption and inflation.
- The analyst believes Costco continues to execute well in a tough operating environment.
- Overall, Feldman thinks Costco should remain a share gainer, with its solid sales and high membership renewal rates.
- Also Read: Costco Wholesale Posts 10.1% Rise In September Sales
- Price Action: COST shares are trading higher by 2.83% at $510.60 on the last check Friday.
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