Retailers like Walmart (WMT) and Target (TGT) are campaigning to force Amazon.com (AMZN) to pay sales taxes. While these retailers headline the effort and would certainly gain from any such decision, other large players like Costco (COST) have (relatively) flown under the radar. Could Costco see the same benefit? Costco traditionally competes with warehouse club operators like BJ's Wholesale Club (BJ) and Sam's Club, in addition to companies like Walmart, Best Buy (BBY) and Target.

Our price estimate for Costco's stock stands at $64.67, a roughly 10% discount to the stock's current market price.

Costco (COST) traditionally competes with warehouse club operators including BJ's Wholesale Club (BJ) and Sam's Club, in addition to large retailers like Walmart (WMT), Best Buy (BBY) and Target (TGT). The retailer operates a warehouse club model wherein it charges annual membership fees to customers and, in turn, offers deep discounts on selected merchandise.

The company recently released its earnings and based on continued strength in international sales and controlled capital expenditures, we have updated our price estimate to $64.67. This price estimate stands roughly 10% below market price.

Walmart (WMT) is the world's largest retailer, competing with companies like Target (TGT), Costco (COST), Amazon.com (AMZN) and Best Buy (BBY). The company recently released its earnings for last quarter and we have updated our price estimate to $70.75, which implies a 30% premium to the market price.

One of the outcomes in the earnings was continued improvements in Sam's Club's results. Sam's Club is a warehouse club that charges a membership fee to its customers and gives them an opportunity to buy goods at lowest prices in the market. It offers bulk displays of brand name merchandise, including hard goods, some soft goods, commercial-sized grocery items, and selected private-label items under the "Member' Mark", "Bakers & Chefs" and "Sam's Club" brands in a warehouse club format.

Costco Wholesale Corporation (COST) issued its fiscal second-quarter report this morning, but it looks as if the market isn't being supportive of the numbers. At the time of this writing, shares of the warehouse club were off by 3.1% to $71.30. Volume was significant.

In one sense, the bottom-line performance was good, and in another sense, it was mediocre. Here's the good: according to the Associated Press, net profit rose twelve pennies to 79 cents per share. Here's the mediocre: that figure only succeeded in matching Wall Street's projection.

U.S. stock futures are higher Wednesday morning as investors await labor market data. Crude oil traded above $100 a barrel. Futures on the Dow Jones Industrial Average rose 27 points to 12,049.00 and futures on the S&P 500 stock index gained 3.6 points to 1,304.70. Nasdaq 100 futures gained 5.75 points to 2,317.25.

The blue-chip Dow index dropped 1.38% to close at 12,058 on Tuesday.

After the opening bell, Federal Reserve Chairman Ben Bernanke is scheduled to present a monetary policy report to the U.S. House Financial Services Committee. The Fed's Beige Book will be released at 2 p.m. ET.

Costco Wholesale (COST) reported Q2 EPS of 79 cents, matching analysts expectations. Costco reported Q2 revenue of $20.88 million, versus the consensus of $20.54 billion. The wholesaler reported a 7% rise in its Q2 same-store sales.

December is not shaping up to have been the retail windfall that many experts predicted, which may be setting up a rather scary situation. Don't worry folks, the experts are going to blame the poor December revenue on different factors, including strong November sales taking away from December and post-Christmas sales suffering from the Northeast blizzard.

First things first, not all retailers have reported their results -- a majority of heavy hitters will report today. Nevertheless, the results are being described as "slow and steady" rather than the expected blowout holiday shopping season. For example, Costco (COST) reported sales that increased 6%. This is positive data, unfortunately expectations called for an increase of 6.2%. Target (TGT) saw sales increase 0.9%, well short of the expected 4%. Of course sales were better at Macy's (M), right? I mean they are adding jobs and all. Wrong, sales did increase (3.9%) but missed expectations (4.5%).

At the time of this writing, shares of Costco Wholesale Corporation (COST) weren't receiving a lot of interest after the release of fiscal Q1 numbers. They were down 0.5% to $69.31. Volume was below average (although it might be above average by the time the bell rings).

Seems like history is repeating itself. A check of my article on the company's fiscal fourth-quarter report shows that the market wasn't making things exciting for the stock back then either.

Analyst Upgrades

• Piper Jaffray upgraded Red Hat (RHT) to overweight from neutral.
• Honeywell (HON) was upgraded to outperform from neutral at Cowen.
• Regal-Beloit (RBC) and Actuant (ATU) were upgraded to buy from hold at Jefferies.
• RW Baird upgraded MedAssets (MDAS) to outperform from neutral.
• Savvis (SVVS) was upgraded to outperform from market perform at William Blair.

Analyst Upgrades

• Piper Jaffray upgraded Duoyuan Global Water (DGW) to neutral from underweight, citing the potential for positive fundamental news flow through the end of the year, and upped its price target to $16 from $9.
• Jefferies upgraded Alcatel-Lucent (ALU) to buy from underperform, expecting a benefit from a significant ramp in EVDO software sales as mobile data growth accelerates.
• Myriad Genetics (MYGN) was upgraded at RBC Capital to outperform from sector perform with a $23 price target based on valuation and potential to be acquired.
• Goldman upgraded Mohawk (MHK) to neutral from sell with a $53 price target.
• Smithfield Foods (SFD) was upgraded to outperform from market perform at BMO capital with a $21 target.
• Priceline.com (PCLN) was upgraded to outperform from market perform at Morgan Keegan.

Analyst Upgrades

• Deutsche Bank upgraded EMC (EMC) to buy from hold after channel checks indicated storage demand remains solid. The firm sees potential upside in 2011 from the company's new products and upped its target for shares to $25 from $20.
• BB&T upgraded American Commercial (ACLI) to buy with a $50 target based on pricing leverage and cost reductions.
• Argus upgraded Abercrombie (ANF) to buy with a $52 target based on accelerating comps.
• PerkinElmer (PKI) was upgraded to equal weight from underweight at Barclays.
• Valeant (VRX) was upgraded to market perform from underperform at Wells Fargo with a $26 to $28 valuation range.
• Blackrock (BLK) was upgraded to buy from hold at Deutsche Bank.

Analyst Upgrades

• Piper Jaffray upgraded Salesforce.com (CRM) to overweight from neutral, citing valuation following the recent sell-off and strong business trends. The firm has a $115 price target for shares.
• Keefe Bruyette upgraded M&T Bank (MTB) to market perform from underperform on valuation after AIB sold its stake in the company. The firm has a $72 price target for shares.
• Jefferies upgraded OGE Energy (OGE) to buy from hold following the announcement that ArcLight will purchase 9.9% of OGE's interest in Enogex for $183M and believes this deal highlights the hidden value associated with Enogex. The firm raised its price target to $51.50 from $43.
• Thomas & Betts (TNB) was upgraded to outperform from perform at Oppenheimer.
• Bayer (BAYRY) was upgraded to buy from neutral at UBS.
• Texas Roadhouse (TXRH) was upgraded to outperform from neutral at Baird.

Costco (COST), a warehouse club whose competitive colleagues include BJ's (BJ) and Wal-Mart (WMT), isn't seeing much action this afternoon. At the time of this writing, its shares were up only 0.03% to $64.68. Big yawn. Volume, however, is quite strong.

The company's chart shows a stock that just recently decided to break out of some sideways action and enter into rally mode. Will it continue? Or, should today's flat action be taken as an indicator that maybe it's time to sell out and check in on the equity at a later date?

Analyst Upgrades

• Soleil upgraded Baxter (BAX) to buy from hold on expectations the company will benefit from supply disruptions at privately-held plasma manufacturer Octapharma. The firm raised its price target for shares to $56 from $45.
• Deutsche Bank upgraded Dolby (DLB) to buy from hold, citing valuation following the recent underperformance of shares. The firm upped its price target to $75 from $70.
• Bernstein upgraded Alexion (ALXN) to outperform from market perform based on increased Soliris forecasts for PNH and potential in aHUS. The firm also raised its price target to $75 from $60.
• Agrium (AGU) was upgraded to buy from neutral at BofA/Merrill.
• Roche (RHHBY) was upgraded to conviction buy from neutral at Goldman.
• BMO Capital upgraded Energizer (ENR) to outperform from market perform.

Analyst Upgrades

• Goldman upgraded Costco (COST) to buy from neutral based on valuation, improving fundamentals and potential catalysts. The firm raised its price target to $68 from $62.
• Soleil upgraded MGM Resorts (MGM) to buy from hold, citing valuation, easing balance sheet concerns and a multiyear convention recovery. The firm upped its target for shares to $14 from $13. Note, Soleil also downgraded Las Vegas Sands (LVS) to hold from buy.
• Piper Jaffray upgraded Phillips-Van Heusen (PVH) to overweight from neutral with a $59 price target following the company's better-than-expected Q2 results.
• Dell (DELL) was upgraded to buy from outperform at CLSA.
• CommScope (CTV) was upgraded to buy from neutral at UBS.
• EnCana (ECA) was upgraded to sector outperformer from sector performer at CIBC.

Friday morning, UBS issued an upgrade to Costco Wholesale (COST), elevating the warehouse retailer to buy from neutral.

The upgrade was made based on valuation, as UBS feels that recent weakness in the stock price offers a good entry point. In fact, UBS notes that Costco has "one of the world's best retail business models." The brokerage noted that removing calendar shifts and gas sales from Costco's comparable sales figures shows an "improving trend in all categories and in all U.S. regions."