Costco Wholesale Corp. (NASDAQ: COST) is scheduled to report its fiscal first-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $1.17 in earnings per share (EPS) on revenue of $27.65 billion. In the same period of the previous year, the retailer posted EPS of $1.12 and $26.87 billion in revenue.
This company has become the ultimate destination for the American consumer regardless of the economy. Costco has a unique business model. It operates membership warehouses, where the company buys the majority of its merchandise directly from manufacturers, essentially cutting out the middleman. Costco sells in bulk but also at a lower price, thus fueling its rapid growth. With consumers having more free cash to spend as gasoline prices have dropped, this major retailer may continue to see large revenue gains.
Costco remains one of the few conventional retailers with metrics like store traffic, market share gains and a validated model that could bode well in international growth and expansion. The company is largely unharmed by e-commerce and continues to add stores at strategically mapped out locations.
A few analysts weighed in on Costco ahead of the earnings report:
- Sterne Agee CRT has a Buy rating and raised its price target to $186 from $154.
- Deutsche Bank upgraded it to Buy from Hold and raised its price target to $200 from $152.
- Robert Baird has an Outperform rating and raised its price target to $180 from $165.
- Stifel Nicolaus has a Buy rating and raised its price target to $180 from $162.
- Piper Jaffray reiterated an Overweight rating and raised its price target to $171 from $158.
So far in 2015, Costco has outperformed the market, with the stock up 23% year to date. Over the past 52 weeks, the stock is up 22%.
Shares of Costco were trading up 0.5% at $167.94 Tuesday, with a consensus analyst price target of $169.30 and a 52-week trading range of $117.03 to $168.36.
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