NEW YORK (
sore spots -- lower food and gas prices -- may soon be healing.
As a result, Costco was upgraded by Morgan Stanley on Tuesday to overweight from equal weight.
Shares of the company rose 2% to $56.58 in early morning trading.
Analyst Mark Wiltamuth said he expects to see gross margin recovery from higher sales in non-food categories and improvements in California. The state, one of the hardest hit by the recession, consists of 30% of Costco's store base.
Last week, Costco reported a 2% slip in
, beating analysts' expectations of 5.7% decline.
also surpassed expectations with a 6% drop. Wall Street forecast an 8% miss.
-- Reported by Jeanine Poggi in New York
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