Key Stats for Costco Stock
- 52-Week Range: $844 to $1,067
- Current Price: $1,049
- Street Mean Target: $1,073
- Street High Target: $1,1315
- Analysts Consensus: 19 Buys, 3 Outperforms, 12 Holds, 1 Underperform, 2 Sells
- TIKR Model Target (Aug. 2030): $1,423
Costco Delivers a Q2 Beat and Signals Price Cuts If Tariff Refunds Materialize
Costco Wholesale Corporation (COST) operates 924 membership warehouses worldwide and posted Q2 fiscal 2026 net sales of $68.24 billion, up 9.1% year-over-year, beating Wall Street’s estimate of around $69 billion on comparable sales that exceeded expectations following the February 15 quarter close.
Comparable sales rose 7.4% in the quarter, or 6.7% adjusted for gasoline price deflation and foreign exchange, outpacing analyst estimates of 5.88% adjusted comp growth.
Digital momentum was the sharpest outperformance: digitally-enabled comparable sales grew 22.6%, with site traffic up 32% and app traffic up 45%.
Net income for the quarter came in at $2.035 billion, up nearly 14% from $1.788 billion a year earlier, with diluted EPS of $4.58 against $4.02 in Q2 fiscal 2025.
Membership fee income reached $1.355 billion, up 13.6% year-over-year, with 82.1 million total paid members and 40.4 million executive memberships growing 9.5%.
CEO Ron Vachris addressed the tariff environment directly on the Q2 earnings call: “At Costco, we always want to be the first to lower prices and the last to raise them. During the second quarter, we lowered prices on key items such as eggs, cheese, coffee and some paper products as we saw lower inflation in these commodities.”
The company also committed to returning any IEEPA tariff refunds to members through lower prices, a pledge that carries real commercial weight: Costco has already been lowering prices on textiles, bedding, and cookware as the tariff landscape shifts.
Post-quarter monthly sales data reinforces the trajectory: March net sales reached $28.41 billion, up 11.3%, and April net sales reached $23.92 billion, up 13.0%, with April total comparable sales up 11.6%.
Wall Street’s Take on COST Stock
The investment case for Costco stock is not complicated, but it is frequently misread by investors who mistake its premium valuation for a ceiling rather than a structural feature of the model.
Wall Street’s consensus is anchored to revenue growth as the primary metric, and the data supports why: consensus estimates project COST revenue at around $69 billion for the quarter ending May 31, up around 10% year-over-year, with annual revenue reaching around $94 billion for the August 2026 fiscal year end, representing around 9% growth.
EBITDA is growing faster than the top line, with consensus projecting around $3.48 billion for the May quarter, up around 13% year-over-year, and around $4.63 billion for the August quarter, up around 12%, as membership fee leverage and modest operating efficiencies compound.
The Kirkland Signature private label, which typically delivers 15% to 20% savings versus national brands, is gaining penetration across food and nonfood categories; Q2 saw approximately 30 new Kirkland items launched, providing a cost structure advantage that insulates margins even as Costco leads prices down.
The analyst consensus is decisively bullish: 19 Buy ratings, 3 Outperforms, 12 Holds, 1 Underperform, and 2 Sells, with a mean price target of around $1,073 against the current price of $1,048.95 — implying about 2% upside at consensus, though the high target sits at $1,315.
What explains the wide spread between the median target and the high? The debate is whether Costco stock’s long-term value is a function of its warehouse expansion path — management has guided for 28 net new openings in fiscal 2026 and is targeting 30-plus per year going forward — or a near-term rerating risk if the macro environment deteriorates and the premium multiple compresses.
Personalised e-commerce is emerging as a new margin catalyst: in Q2, personalized product recommendation carousels generated over $470 million in e-commerce sales, a figure that was essentially zero two years ago, and management described a clear road map for expanding this capability.
With 11.6% comparable sales growth in April and consistent 6% to 7% underlying comparable sales growth across multiple quarters, COST at its current price appears undervalued relative to the compounding quality of its membership economics and the still-underpenetrated e-commerce opportunity.
What Does the Valuation Model Say?
TIKR’s base case values Costco Wholesale Corporation at $1,423 per share, anchored to a mid-case revenue CAGR of around 7% through fiscal 2030, a net income margin expanding to 3.2%, and an EPS growth CAGR of around 8%, implying a total return of around 36% over the next 4 years with an annualized IRR of around 7%.
At $1,049 against a TIKR base case of $1,423 and a 10-year EPS growth CAGR of 13%, Costco stock appears undervalued for investors with a 4-plus year horizon willing to hold a quality compounder through near-term multiple noise.
The central tension for Costco investors is not whether the business will grow — it is whether the stock’s current valuation already prices in the growth, or whether the warehouse expansion runway and e-commerce inflection represent a value that the market is discounting.
Base Case:
- TIKR’s mid-case projects revenue growing at around a 7% CAGR to fiscal 2030, with net income margins expanding from 2.9% to 3.2%
- EPS growth CAGR of around 8% drives a base case stock price of around $1,938 by August 2034, implying an annualized return of around 8%
- Warehouse count target of 30-plus net new openings per year supports sustained top-line compounding without meaningful market saturation risk in underpenetrated international markets
- Monthly comparable sales have held at 6% to 7% core growth for multiple consecutive quarters, with April’s 7.8% adjusted comp sales confirming no demand deceleration
- Membership fee income growing 13.6% year-over-year and executive membership upgrades up 9.5% signal deepening loyalty, not plateauing engagement
Downside Risk:
- TIKR’s low case projects a revenue CAGR of around 6.4%, with a total return of around 44% over 10 years — still positive, but implying far less annual alpha than the base case
- The current P/E is not compressing: the TIKR model shows a P/E change CAGR of (0.6%) in the mid case, meaning the return is largely earnings-driven with minimal multiple expansion support
- Tariff environment remains fluid; while Costco has demonstrated agility in managing sourcing across its limited-SKU model, a sustained disruption to Middle East shipping lanes could raise costs and crimp the 13% EBITDA growth trajectory
- U.S. paid membership growth has slowed to around 5% as the base matures, and the slight renewal rate softness (U.S. down 10 basis points to 92.1%) could widen if digital-channel members continue renewing at lower rates
- A special dividend is not guaranteed: management acknowledged on the Q2 call that cash balances have rebuilt to pre-dividend levels, but said no plans exist at this time, capping near-term total return optionality
Is Costco stock undervalued?
TIKR’s base case values Costco Wholesale Corporation at around $1,423 per share, implying around 36% total upside from the current price of $1,048.95.
With 22 analysts issuing Buy or Outperform ratings and a mean Street target of around $1,073, consensus supports a positive view, though the Street target understates TIKR’s longer-horizon valuation.
The key variable is whether the 30-plus warehouse-per-year expansion plan holds on schedule — if it does, the compounding case stays intact.
What do analysts say about COST stock?
As of May 2026, 32 analysts cover Costco stock, with 19 Buy ratings, 3 Outperforms, 12 Holds, 1 Underperform, and 2 Sells.
The mean price target is around $1,073, with the high target at $1,315 from BMO.
The bullish thesis centers on Costco’s structural advantages in supply chain efficiency, value pricing, and membership loyalty — while bears point to a premium multiple that leaves little room for earnings disappointment.
What happened to Costco stock after Q2 2026 earnings?
Costco reported Q2 fiscal 2026 net sales of $68.24 billion, up 9.1% year-over-year, with diluted EPS of $4.58 against $4.02 in Q2 fiscal 2025. Comparable sales beat estimates at 6.7% adjusted, and digital comparable sales surged 22.6%.
The company also committed to returning any IEEPA tariff refunds to members through lower prices. Monthly sales data since the report has confirmed the momentum: March net sales rose 11.3% and April rose 13.0%.
Should You Invest in Costco Wholesale Corporation?
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