UBS Global Research expects to see "continued progress" on Costco membership in the second quarter of 2017.
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UBS: Costco membership will rise in 2017 (COST)
Along with increased membership could also come higher fees.
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Worldwide membership renewals and new sign ups remain strong, driven by "increased acceptance of [Costco's] more attractive Visa CC offering in the US," according to the team in a note published on Monday.
The team believes that Costco could hike membership fees next quarter, or alongside second-quarter results. "Considering fees have historically accounted for ~75% of its EBIT, any increase would likely help support further upward momentum for its shares."
According to the team, Costco's current stock price "does not fully price in benefits from COST's move to Visa and its impending fee hike."
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