Costco's Stock Gets a Boost From Goldman Sachs Upgrade

Costco Wholesale Corp.'s stock ran up 2.1% in afternoon trade Wednesday, after Goldman Sachs turned bullish on the warehouse club operator, citing accelerated earnings momentum coupled with attractive valuation. Analyst Matthew Fassler raised his rating to buy, after being at neutral since Jan. 12, 2015. He boosted the stock price target to $175, which is 15% above current levels, from $169. Fassler said Costco has "high-visibility" catalysts for next year, such as the transition to a new credit card and a prospective membership fee increase. "While these catalysts are well understood, the stock has drifted to some of its lowest valuation metrics in some time, giving as an opportunity to step in," Fassler wrote in a note to clients. The stock has lost 5.9% year to date, while the SPDR S&P Retail ETF has slipped 2% and the S&P 500 has gained 2.5%.