Costco Retains ‘Hold’ Rating (COST, C)

Costco Wholesale Corp. COST reported its F3Q10 earnings numbers in-line with consensus estimates. Consequently, Citigroup C has raised its EPS estimates for F2010 and F2011. The company is also consistently improving its MFI growth. Costco (COST) is expected to benefit from robust traffic trends, although its competitive environment will remain challenging. Costco is also growing its Membership Fee Income. Executive membership now represents 32% of members and 67% of slaes. The percentage of new members signing up as executive members has also increased from 10-12% to more than 20%. Citi (C ) has raised its F2010 EPS estimate to $2.89 from $2.83. Costco has been given a ‘hold’ rating with a price target of $65.