NEW YORK (TheStreet) -- Shares of Costco (COST) - Get Report were higher in early-afternoon trading on Wednesday as Morgan Stanley analysts say the company isn't being hurt by Amazon.com's (AMZN) emerging dominance in the retail market because customers believe the businesses fulfill different needs.

The firm has an "overweight" rating and $165 price target on shares of Issaquah, WA-based Costco.

A significant number of customers have both an Amazon Prime subscription and a Costco membership, an overlap that Morgan Stanley said it expects to increase over time. 

About 95% of Costco and Amazon Prime subscribers said in a survey that they plan to renew their memberships, "which speaks to high loyalty and low churn" at both companies, the firm added. 

Costco's warehouse club model is one of the more protected business models from e-commerce, plus the company has higher customer demand for packaged/fresh grocery items than Amazon.com, the firm noted.

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Morgan Stanley said the data should provide relief to investors who are concerned that Costco's recent top-line moderation could be related to pressures from Amazon.com.

(Costco is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trialhere.)

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