Costco Wholesale (COST) continues to deliver "compelling value" despite concerns around consumer confidence and "distractions from tariffs," UBS said in a Thursday note.

According to UBS, Costco's March sales results, which showed an 8.6% year-over-year increase to $25.51 billion, proved the business was seeing "strong momentum on both an absolute and relative basis."

Costco also reported that net sales for the first 31 fiscal weeks increased 8.3% year-over-year to $158.87 billion from $146.64 billion in same period of the previous year.

The investment firm also said it believes Costco did not see evidence of consumers scrambling to buy goods before the implementation of tariffs, and that its numbers were driven by strong traffic and market share gains as customers continued to consolidate their shopping at the retailer.

Meanwhile, UBS said Costco continues to manage well despite the tariff uncertainty, with about two-thirds of what it sold in the US sourced from within the country.

The analysts said "strong traffic and share gains" form the base of their view on why the company "should maintain its premium multiple."

UBS has a buy rating on the stock with a price target of $1,205.

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