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Costco Wholesale

(COST) - Get Costco Wholesale Corporation Report

was upgraded by a Credit Suisse analyst on Wednesday, sending its shares up more than 4% to $49.09 in morning trading.

Analyst Michael Exstein boosted his rating on the stock to outperform from neutral, citing the company's rising traffic levels.

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If the economy remains subdued, Costco's same-store sales should be stable, without more significant pressure on profit margins, he said. And if the economy actually improves, higher store traffic could translate to big-ticket and discretionary purchases.

Costco has been cutting costs and plans to grow its private-label brands, which should boost profit margins. The company also has said it can double its size in a decade, a good sign for future earnings.

Exstein hiked his target price to $55 from $39.

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