Costco Wholesale's (COST) strong revenue momentum is expected to persist amid "limited earnings upside potential," Oppenheimer said Monday in a note.
Faced with "accelerating inflation pressures and tariff risks, we believe the company's superior value proposition and ability to adjust product mix should help drive further market share gains and manage margins better than peers," the report said.
"Near term, we remain focused on core margins amid inflationary pressures should Costco choose to make additional price investments in areas such as eggs," Oppenheimer said.
A potential stock split may bolster the stock after gains in 2024 and a year-to-date rally, the report said.
Fiscal Q2 earnings are due Thursday.
Oppenheimer maintained Costco's outperform rating and its price target of $1,130.
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