Costco called a top retail stock pick for 2023 as analysts look past mixed earnings report
Eric Thayer

Costco's (NASDAQ:COST) slight miss with its Q3 comparable sales tally was not enough to knock analysts off their positive stances on the retailer.
Bank of America reiterated a Buy on COST due to the strong long-term positioning of the company. The firm thinks Costco's share gains given COST's strong value proposition and price positioning, as well as potential store acceleration given excess demand - set it up for continued earnings power. The firm highlighted COST's stable and rising EBITDA margin despite volatile gas prices and the expected earnings support from future membership fee increase. Valuation on Costco is still seen as attractive by BofA.
For its part, Cowen said Costco (COST) is uniquely situated in an inflationary environment and could stand to gain as consumers get increasingly price conscious. Analyst Oliver Chen named Costco (COST) a best idea for 2023 with a lush price target of $650.
"Costco is well-positioned in an inflationary environment and could also benefit from increased trade down traffic as higher income consumers shop for quality value," noted Chen. 
Chen and team expect Costco's (COST) traffic to remain strong through its value inspired treasure hunt and service offerings. Meanwhile, the focus on volume sales, item-driven assortment, and large-scale operations is said to give it a competitive advantage. 
Seeking Alpha Marketplace author Michael Wiggins De Oliveira also spelled out the bull case on Costco (COST) in a new article. Crucially, he reminded that Costco's shareholders are united in that they simply don't sell the stock with +30% ROE on the back of a temporary slowdown.
Shares of Costco (COST) fell 0.70% in premarket action on Friday.