Costco(COST:NSD) Deutsche Bank lifts target on strong September sales

STA Research
by: STA Research

Deutsche Bank’s analyst Paul Trussell raised his target on Costco to $310 from $305, and maintained his Hold rating on the stock. Trussell raised the target on the release of strong September sales.

Loop Capital also raised their target on the company to $405 from $395, and maintained their Buy rating. Analyst Laura Champine states her target increase is also based on September sales increases, like Deutsche Bank, and expects sales to continue to increase. 

STA Research(stocktargetadvisor) has a average target of $358 on the stock, and a consensus Strong Buy rating.  STA’s view of the stock is Slightly Bullish with a score of 6 out of 10, where 0 is very bearish and 10 very bullish.

 
What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Superior return on assets
The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Earnings Growth
This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

 

What to not like:
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Highly leveraged
The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

 

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