Costco First-Quarter Earnings: What Wall Street Is Saying

Costco topped first-quarter estimates, leading to a number of bullish analyst notes on Friday.
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Costco  (COST) - Get Report shares were little changed on Friday after the membership-based warehouse retailer reported reported first-quarter results that topped estimates. 

For the quarter ended Nov. 22 the Issaquah, Wash., company reported adjusted earnings of $2.29 a share compared with the consensus estimate of $2.09 a share in a FactSet survey. Revenue of $43.21 billion beat the estimate of $43.08 billion. 

Here is what Wall Street is saying about Costco post-earnings. 

JPMorgan (Overweight Rating Affirmed, PT Raised to $411 from $406)

[Costco] continues to be a core holding given that its unrivaled value proposition (11% gross margins) to its fiercely loyal customer base (about 90% renewal rate) and global growth opportunity (2% to 3% annually and likely double the current store base from here) are a rare combination in retail and consumer staples (the latter representing its segment classification). 

- Christopher Horvers

Oppenheimer (Outperform Rating and $400 PT Affirmed)

A few key factors underpin our views: 1) unique and improving consumer value proposition; 2) open-ended worldwide growth prospects; 3) leading competitive position poised to continue to drive share gains; 4) consistent track record of shareholder returns; 5) strong management team; 6) potential for sustainable top- and bottom-line delivery even against a more competitive retail backdrop; and 7) prospects for a special dividend. We view Costco as both an attractive shorter-term beneficiary of money flows related to coronavirus fears and a longer-term winner, which should help to drive continued outperformance.

-Rupesh Parikh

Cowen (Outperform Rating and $410 PT Affirmed)

Costco is well positioned to continue delivering robust earnings growth over the near to medium term, driven by square-footage growth, membership revenue growth, and industry leading [comparables] growth on strong physical and digital momentum. We view Costco as one of the best positioned retailers to win market share over the coming quarters during and after the pandemic. We believe superb price/value, luxury product, and streamlined assortment help drive a sustainable high-margin membership stream.

- Oliver Chen