Citigroup Maintains "Neutral" Rating for Costco (COST)

Citigroup Maintains “Neutral” Rating for Costco (COST)


Citigroup reported on Friday that they have maintained their “Neutral” rating for discount retailer, Costco Wholesale Corporation(COST).

The firm has reaffirmed its “Neutral” rating and $100 price target for COST. This price target suggests a 2.7% increase from the stock’s current price of $97.29.

A Citigroup analyst noted, “COST’s F1Q13 EPS of $0.95 were two pennies ahead of our estimate and consensus. The company benefited from a strong MFI increase as a result of its November 2011 fee increase. However, operating margins were disappointing due to a decrease in core merchandising margins and incremental expenses associated with COST’s technology modernization investments. Looking ahead, we are more cautious on COST’s margin outlook in light of potential food inflation in 2013 and technology investments. Over time, new club openings, especially internationally, should drive topline and margins.”

Costco shares were down 62 cents, or -0.63% during Friday morning trading. The stock is up 16.8% YTD.

The Bottom Line
Shares of Costco (COST) have a 1.13% dividend yield, based on the latest intraday stock price of $97.31. The stock has technical support in the $93-$95 price area. The stock is trading near the all-time high price range of $102-$105 a share.

Costco Wholesale Corporation(COST) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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