Wall Street Strategies Reiterates Neutral on Costco Wholesale Corporation

Wall Street Strategies reiterated its Neutral rating on Costco Wholesale Corporation COST. In a research report published today, Wall Street Strategies listed a number of positive developments for the company. In the report, Wall Street Strategies states, "Costco did have another fine quarter on expense management, gaining some help from increased gasoline sales (while it harms gross margin, it's a friend to expenses during an inflationary period). We must also highlight the strong 10% increase in membership fee income. To us, the gain, which is absent a fee rate increase, says a fair amount on the global economy: (1) U.S. households earning $75,000 annually are renewing Costco memberships, not giving up the saving money mentality in a world that is not 2009, but is also not 2007; (2) U.S. households earning $150,000 annually have migrated to Costco, enticed by the discounts and treasure hunt; and (3) Costco is having success in transplanting its model overseas, not the case with Wal-Mart (WMT). All in all, we maintain a neutral rating on the stock heading into the conference call later today. Two areas of further interest: (1) Japan long-run views; (2) UK in light of recent economic data." In today's trading, Costco lost 2.41% and is currently standing around $79.39.