Costco Is Worth Too Much Money, Top Firm Says

Costco is expected to report strong July same store sales growth.
By Tony Owusu ,

Strong July same store sales growth will help stabilize Costco Wholesale Corp.'s (COST) - Get Report when the company reports those results tomorrow, however Guggenheim's John Heinbockel is worried that it could cause the stock to be overvalued. 

"Bottom line, we think broad-based comp strength, across geographies and product categories, should raise investor confidence in the brand, business model, and lengthy growth runway," Heinbockel said. "That said, we remain Neutral-rated in the belief that the current valuation-11.4x calendar 2018E EBITDA-is still elevated and that consensus 2018 expectations may be too optimistic."

Costco shares were up slightly on Tuesday. 

More of What's Trending on TheStreet:

Loading ...