-- Costco (COST) reported consistent comparable sales in March, with a US core comp of 6.2% and a US 2-year stacked core comp of 15% indicating "strong and steady" results, UBS Securities said in a note emailed Thursday.
The composition of its comparable sales growth will be in focus, because its ticket was the primary driver of overall comp growth, while traffic grew 1.5%, according to the note.
The retailer is seeing healthy demand trends and UBS expects the momentum to continue. Recently, Costco has seen more visits as a result of higher fuel prices, and around 50% of these visits extend to the warehouse as well, boosting merchandise sales, the brokerage said.
Higher oil prices will be favorable for Costco's comps in the near-term, UBS added.
The brokerage said it is bullish on Costco amid the challenging outlook for broadline and food retailers.
UBS maintained a buy rating on Costco with a price target of $1,205.
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