Costco price target raised to $600 by BMO

BMO Capital Markets raised its Costco Wholesale Corp.
COST,
+0.89%
price target to $600 from $555, citing strong traffic, stabilizing gas margins, and the advantages of the retailer’s business model. “Costco’s traffic remains strong with potentially favorable margins despite near-term big-ticket pressures, which could begin to cycle in late 2023/early 2024,” wrote BMO analyst Kelly Bania, in a note released Wednesday. Gas margin reversion fears are abating, according to Bania, who also noted the company’s insulation from retail shrink, where inventories can be impacted by factors such as theft. “Costco’s advantaged business model is likely to remain insulated from broadening industry-wide shrink pressures, warranting a higher multiple,” wrote Bania. BMO maintained its outperform rating for Costco. The retailer reports fiscal fourth-quarter results on Sep. 26.