Costco and BJ's land higher estimates at Loop Capital because inflation may work in their favor
Scott Olson/Getty Images News

Loop Capital Markets raised estimates on both Costco (NASDAQ:COST) and BJ's Wholesale Club Holdings (NYSE:BJ) on its view that inflation could end up being a tailwind for sales.
"We believe traffic is growing for both companies as their competitive gas and food prices drive consumers to the clubs," updated analyst Laura Champine.
Champine hiked the price target on Costco (COST) to $650 from $645 and raised the PT on BJ's Wholesale (BJ) to $80 from $70 on the expectation for higher revenue.
A big wildcard with both Costco (COST) and BJ's Wholesale (BJ) is that the retailers could be in line to fire off membership fee increases this year.
Champine noted that Costco (COST) has historically raised membership fees every five and a half years.
"This June marks five years since the last fee increase. We think the likelihood of a fee hike announcement is increasing each quarter. We also expect BJâs to follow Costcoâs fee hike based on historical patterns."
Costco (COST) rose 0.56% in premarket action to $597.64 and BJs Wholesale Club (BJ) gained 0.63% to $70.00.
Compare growth, profitability, and valuation metrics on Costco and BJ's.