BMO Capital analyst Kelly Bania raised the firm’s price target on Costco to $800 from $770 and keeps an Outperform rating on the shares. The company’s Q2 results were “strong fundamentally”, supported by membership growth and strength in renewal rates, the analyst tells investors in a research note. Friday’s negative stock reaction is likely reflecting disappointment with a lack of a membership fee increase, though the firm maintains that Costco’s advantaged business model, consistency of results, and execution make it deserving of a premium multiple, BMO added.
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