Low TV Sales Hurt Costco's (COST) Overall Sales

Goldman Sachs analysts Adrianne Shapira, Morry Brown, Benjamin H. Rowbotham and Scott Kaufman-Ross rated shares of Costco Wholesale Corporation COST Neutral, with a price target of $66 per share. The analysts said that they were disappointed with Costco Wholesale Corporation's (COST) 1st quarter results, which fell short of consensus estimates. For its part, Costco pointed out that its overall comparable sales were up 2.8% but declining comparable sales for televisions were hurting the company's results. The Goldman Sachs analysts wrote, "While BBY’s stock sold off 6.1% in trading, COST was the top performing name within the off-mall side of our coverage, advancing +2.9% (vs. S&P 500 +2.4%). Given the read across to continued softness in the electronics category and COST’s lofty multiple (20.2X our FY2010 EPS estimate), we do not believe this divergence of performance is warranted and instead believe the market is due to connect the dots to drive a potential near-term retreat in COST’s share price. We continue to believe COST needs to see an uptick in discretionary sales to push shares higher, and we believe this is unlikely as long as hardlines continues to restrain total company comp performance."