Piper Jaffray Reiterates Overweight Rating on Costco (COST)

Piper Jaffray is out with a research report this morning, where its reiterates its Overweight rating on Costco Wholesale Corp. COST; it has a $68.00 price target on the stock. The PJ analysts said that they are maintaining their July comp estimate of +6% vs. the Consensus mean of +5.8%; this assumes “a core merchandising comp of ~+4.3%” with combined gas and F/X estimates providing a tailwind of +2%. They analysts added that they continue to believe COST will achieve solid performance in Q4 given the June commentary the company provided, as well as the trends the are seeing in July. They also believe that the recent weakness in TV sales, which the company has highlighted in previous quarters, will likely improve into August. As for valuation, they remarked, “We continue to rate COST Overweight with a Price Target of $68, which is based on 22x our 12-month forward EPS estimate of $3.11.”