Costco Wholesale Corp. (NASDAQ: COST) has become the ultimate destination for the American consumer looking to save money and buy products on a large scale. Despite the shares having a relatively flat 2015 thus far, one key analyst sees solid upside for the discount giant.

Oppenheimer is upgrading Costco shares to Outperform and establishing a $160 price target, which implies upside of about 15% from current prices.

This company has for a long while represented one of the world’s best-run and most powerful retail chains, in Oppenheimer’s view. The valuation and lack of a catalyst have kept the firm on the sidelines with Costco, despite the chain’s operating prowess.

Currently, Oppenheimer sees an opportunity in the shares for intermediate to longer term oriented investors. The company has underperformed lately amid modest earnings disruptions and a flow of funds from staples-related names. Shares now trade at one of their lowest relative price-to-earnings (P/E) multiples since 2011.

The company enjoys significant pricing power with its annual membership fee. Oppenheimer foresees a potential incremental hike to its fee serving as a boost to earnings per share (EPS) and the share price as early as fall 2016.

Costco has undertaken IT-related investments over the past several quarters. Oppenheimer is optimistic that the pace of investments will peak in fiscal 2015 and moderate toward zero through fiscal 2017.

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Oppenheimer is now looking for EPS of $5.20 for this fiscal year, versus $5.15 previously and a Wall Street consensus estimate of $5.23. The firm’s fiscal 2016 estimate remains $5.70, compared to a consensus estimate of $5.66. For fiscal 2017, Oppenheimer is looking for earnings of $6.35, versus $6.40 previously and a consensus estimate of $6.26.

Shares of Costco were up 2.7% at $143.24 on Friday. The stock has a consensus analyst price target of $155.38 and a 52-week trading range of $116.58 to $156.85. Thus far in 2015, Costco is down 1% and underperforming a flattish performance in the S&P 500.

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