Costco Back To Top Pick Status At Oppenheimer Amidst Positive Retail Projections

Oppenheimer analyst Rupesh Parikh reiterated an Outperform rating on the shares of Costco Wholesale Corporation COST and raised the price target from $550 to $575.
The analyst added back Costco to top pick status after removing it from the list in November on concerns over aggressive Street forecasts and lingering discretionary big-ticket headwinds.
Given the pullback in shares since then, the company’s better-than-expected delivery of bottom-line profitability on a sub 4% comparable sales, and more muted buyside N-T comp expectations, the analyst sees an improved nearer-term outlook for outperformance.
The improvement includes potential money flows amidst challenges at many discretionary retailers lately, added the analyst.
In the analyst's view, a membership fee increase and a special dividend still likely represent potential positive catalysts down the road.
U.S. adjusted comparable sales increased 1.7% in May with four-year adjusted U.S. comparable trends at 36.1% versus +35.9% in April and +37.0% in March.
The analyst moves even more defensive with the top pick ranking in an increasingly difficult U.S. retail backdrop
The updated top picks include Church & Dwight Co Inc CHD, Chewy Inc CHWY, COST, Prestige Consumer Healthcare Inc. PBH, Ulta Beauty Inc ULTA, and Walmart Inc WMT.
Price Action: COST shares are trading higher by 0.79% at $516.62 on the last check Monday.