Wall Street Strategies Reiterates Hold Rating on Costco Wholesale (COST)

Wall Street Strategies is out with a research report this morning, where it reiterates its Hold rating on Costco Wholesale Corp. COST; it has a $75.00 price target on the stock. Brain Sozzi cited the company's recent December comp store sales announcement, which disappointed in its headline, excluding gas and currency. He noted that COST was a “victim of its own year earlier success,” where headline international comps and U.S. comps strengthened relative to November. Mr. Scozzi continued, “With market expectations running high amid the likelihood of Costco raising its membership fee price and the step up in new unit growth in FY11, the stock became too richly valued for our blood.” “Now that a comp miss is in the fold, we think Costco's inventory increase coming into the quarter (+10%) and what appears to be a more realistic pace of consumer spending post the November buying bonanza, in addition to difficult international comp comparisons, will temper the upside potential to Costco shares near-term.”