On Monday, Telsey Advisory Group adjusted its price target for Costco Wholesale (NASDAQ:COST) shares, increasing it to $785 from the previous target of $750. The firm reaffirmed its Outperform rating for the retail giant's stock.
The update from Telsey Advisory Group comes amid expectations of a solid performance in the company's comparable store sales. The firm anticipates a total comparable sales growth of 4.8% compared to 3.5% in the previous year. This projection includes an expected negative impact from gas prices and foreign exchange rates, which are estimated to reduce growth by approximately 80 basis points.
Excluding these factors, Telsey sees a core merchandise comparable sales increase of 5.5%, up from 5.0% last year. This growth is particularly notable in the United States, where the comparable sales figure, excluding gas, is expected to be 6.0%, a significant rise from the 3.5% recorded a year ago.
In Canada, the forecast for comparable sales growth, excluding gas and foreign exchange, stands at 7.0%, slightly down from 7.3% last year. In other international markets, excluding foreign exchange influences, the growth is projected at 1.5%, which is a decrease from the 11.5% seen in the previous year.
The updated price target and performance expectations reflect Telsey Advisory Group's outlook on Costco's ability to maintain strong sales growth despite potential headwinds. The Outperform rating suggests that the firm continues to view Costco's stock favorably in the current market.
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