12:30 PM EST, 03/05/2024 (MT Newswires) -- Costco Wholesale ( COST ) is likely to deliver limited EPS upside potential in Q2 when the company reports its results Thursday, Oppenheimer said in a note Tuesday.

Oppenheimer analysts, including Rupesh Parikh, said they expect Q2 EPS of $3.52, compared with market expectations of $3.62 for the quarter.

"It is unclear to us whether the Street has properly accounted for the lost interest income associated with paying the special dividend," the analysts said.

They said Costco's premium valuation is warranted even as the analysts warned of a growing risk of a pullback after the shares staged a near-parabolic rally since late October.

"We continue to believe a premium valuation is warranted given COST's superior global unit growth prospects, its leading competitive position, and a track record of driving share gains," they said.

Oppenheimer raised Costco price target to $805 from $760 while keeping its outperform rating.

Price: 764.30, Change: +5.12, Percent Change: +0.67