UPDATE: Bank of America Color on Costco PO Increase

Bank of America, which raised its PO on shares of Costco Wholesale Corporation (NASDAQ: COST), is providing some color on the stock.

“Recent reports from Sam's Club & BJ's (NYSE: BJ) suggest that warehouse channel trends are robust, & we believe Costco continues to outperform within the channel,” Bank of America writes. “Sam's reported strong calendar 1Q +4.2% comps (x-fuel) w/ traffic +2.3% & flat GM% (x-fuel); BJ's +2.4% comp (x-fuel) was driven by +2% traffic growth & merchandise margin growth of +27bps (x-fuel).

“Costco's customer traffic trends cont to outpace the channel, trending +4-5% over the past 2 yrs (vs historical range of ~2%). Given strong industry trends & solid margins along w/ better than expected core-comps in March & April, we are raising our F3Q11E EPS by 2c to $0.76; F11E moves to $3.35. We are shifting our PO $92 to be based on our F13E EPS (vs. F12 prior) based on 21-22x our revised $4.35EPS (up from $4.24).”

Costco Wholesale Corporation closed Friday at $83.40.