Costco Wholesale Corp.’s stock climbed 1.3% in premarket trade Friday, after Oppenheimer analyst Brian Nagel upgraded the warehouse-club retailer, who said he believes the stock’s recent weakness has provided investors with a “rare opportunity” to buy into one of the world’s best run retailers. Nagel raised his rating to outperform from perform, and established a $160 stock price target, which is 15% above Thursday’s closing price of $139.45. He said the stock’s price-to-earnings ratio is at one of the lowest levels since 2011, as some recent modest profit disruptions and a flow of funds out of consumer staples-related names have weighed on the share price. Nagel said a potential increase in the membership fee could help boost earnings over the next couple years. The stock (COST) has lost 1.6% year to date through Thursday, while the SPDR S&P Retail ETF has gained 3% and the S&P 500 has slipped 0.4%. “Valuation and lack of a catalyst have kept us on the sidelines with COST despite the chain’s operating prowess,” Nagel wrote in a note to clients. “We now see an opportunity in shares for intermediate to longer term-oriented investors.”
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