The shares of Costco (COST) are rising slightly after Barclays upgraded the stock to Overweight from Equal Weight. After reviewing the results of its consumer survey, the firm says that Costco is “very protected from” the Amazon (AMZN) threat impacting so many others in brick-and-mortar retailing.
SURVEY RESULTS AND ANALYSIS: Barclays’ survey of 600 consumers showed that more than 80% of them go to Costco in order to buy food, reported Barclays analysts Karen Short and Matthew McClintock. As a result, the analysts believe that Costco is “very protected” from Amazon.
OTHER FACTORS: Easier comparisons, increased investments, and potentially higher gas prices should enable Costco’s comparable sales and traffic growth to accelerate, Short and McClintock believe. Additionally, Costco may declare a special dividend or a dividend enabled by a tax break on the repatriation of overseas cash, the analysts stated.
TARGET: The analysts increased their price target on Costco to $185 from $170.
PRICE ACTION: In morning trading, Costco gained 0.5% to $171 per share.
