sorry Shack, I screwed up, they still have a strong buy but lowered their estimates - they think it's undervalued at more than double the growth rate, which will be in the decline itself according to their revision, ufb...no link, it's from a pay service, I can PM you the full report if you want it:
INVESTMENT CONCLUSION
* Costco Wholesale reported 2Q01 EPS of $0.38, which was slightly below last
year and in-line with Lehman and consensus estimates. For the quarter,
Costco posted net income of $176.6 million. The companys comparable-store
sales increased 2% while total revenues increased 7.4%, to $8.3 billion.
Membership revenue grew 18.6%, to $146.3 million.
SUMMARY
* Following management guidance and our conservative outlook for the retail
sales environment, we are revising our full year 01 and 02 EPS estimates to
$1.37 and $1.62 from $1.40 and $1.65, respectively. Accordingly, we are
revising our 3Q01 and 4Q01 quarter EPS est. to $0.27 and $0.44 from $0.28
and $0.46. respectively.
* Costcos expansion potential, our continued confidence in management and the
companys long-term earnings growth rate of 13%-15% lead us to believe that
the shares of Costco are undervalued. With the shares currently trading at
29.1x our revised 01 EPS estimate of $1.37, we rate the shares a 1 Strong Buy. |
