HomeFinancial MarketsDeutsche Bank Upgrades Costco Stock to "Buy"

Deutsche Bank Upgrades Costco Stock to “Buy”

Although retailers might not seem like the best bet in times of the slow economy, Deutsche Bank believes wholesale retailer Costco is well positioned to weather the challenges ahead. This is reflected in a note to clients recently sent by analyst Krisztina Katai, which saw Costco stock (COST) being upgraded from “Neutral” to “Buy.”

Katai believes the fair value for Costco shares is $579 per share, which was 15 percent more than the value of the stock at the time when the note was sent. However, COST surged more than 4 percent since then to close at 522.95 on Friday.

“Costco is one of the most consistent operators in our group, and its steady traffic gains and high membership renewal rates serve as key differentiators in an increasingly uncertain backdrop,” said Katai in a note sent out on Thursday.

Costco showed its resilience and consistency in a report shared earlier this month that revealed net sales of $22.78 billion for June. This was a 20.4 percent increase in net sales compared to the $18.92 billion in the same period of 2021. Most importantly, the wholesale retailer recorded an increase across all departments. This was a lot better performance than most competitors, who went on to show substantial weaknesses caused by surging inflation and looming recession.

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