Costco coverage started at Buy as William Blair lauds value proposition
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Costco Wholesale Corp. (NASDAQ:COST) gained a bull in William Blair on Thursday.
Equity analyst Philip Blee initiated coverage at Outperform, expecting the retailerâs value proposition to lead to outperformance as consumers tighten their belts. A âbest-in-class private-label brandâ and an engaged membership base of nearly 70M annual members cements the companyâs prime position, in his view. 
âOur pricing analysis implies the average product savings delivers an 11-times return on the annual membership fee,â Blee wrote. âOur proprietary survey suggests the average consumer ranks Costco first on best product price, quality, brand trust, and experience versus its peers.â
While he noted that the valuation is indeed a bit stretched at present, the premium is warranted given the stable nature of the membership base and the upside available for membership fee increases. Shares of the Washington-based retailer edged slightly higher in premarket action.
Read more on recent comparable sales data provided by Costco.