By Sam Boughedda
Costco (NASDAQ:COST) was initiated with an Outperform rating at William Blair by analysts in a note Thursday, who stated that the company is well-positioned in an uncertain environment.
"We expect the strong value proposition, engaged membership, efficient operations, and long runway for growth support further market share expansion," the analysts wrote.
William Blair's analysis of the company's pricing implies the average product savings deliver an 11-times return on the annual membership fee, while the firm's proprietary survey suggests the average consumer ranks Costco first on best product price, quality, brand trust, and experience versus its peers.
Costco shares are down more than 16% in the last 12 months. They have inched 0.3% higher premarket Thursday.
The analysts also pointed to member loyalty, Costco's low-touchpoint operating model providing additional flexibility, and its long runway for top-line growth and margin expansion as other reasons, they are positive on the stock.
"Costco's top growth drivers include the industry's expanding market share, white space to open new warehouses, improving member productivity, and investments in omnichannel," they said.