Key Stats for Costco Stock
- 52-Week Range: $844 to $1,097
- Current Price: $975
- Street Mean Target: $1,082
- Street High Target: $1,315
- Analyst consensus: 19 Buys / 3 Outperforms / 13 Holds / 1 Underperform / 1 Sell
- TIKR Model Target (Dec. 2030): $1,407
Costco Stock Beat Q3 by Every Measure That Matters — and Still Dropped
Costco Wholesale Corporation (COST) reported fiscal Q3 2026 results on May 28, posting net income of $2.19 billion and total revenue of $70.53 billion, both above analyst expectations, but the stock fell several percent in the session that followed.
The decline had a simple cause: gas.
Record fuel volumes drove reported comparable sales to 9.8% but diluted the gross margin rate by 21 basis points to 11.04%, and investors who read the headline margin number without stripping out gasoline inflation sold the stock.
That is the wrong read.
Excluding gas price inflation, the gross margin rate actually improved 1 basis point year over year, and the SG&A rate fell 20 basis points to 8.96% of net sales, reflecting genuine operating leverage in the underlying business.
The final five weeks of the quarter were Costco’s five highest-volume weeks in company history, a detail CEO Ron Vachris shared on the Q3 earnings call.
Membership fee income grew 10.7% to $1.37 billion, the membership base reached 82.9 million paid members with a U.S. and Canada renewal rate of 92.2%, and Executive Memberships climbed 9.6% year over year to 41.2 million.
“As events in the Middle East have had a significant impact on product supply and gas prices, our focus, as always, is to be there for our members by staying in stock and offering the best value,” Vachris said on the call.
The strategic logic running beneath all of this is that gas is not a margin story for Costco — it is a loyalty acquisition tool.
CFO Gary Millerchip also confirmed on the call that members who use Costco gas stations “typically spend more with us in the warehouse” and renew at higher rates, meaning the Q3 fuel surge is creating a cohort of newly activated, higher-spending members that will show up in future quarters.
Digitally-enabled comparable sales rose 21.5%, and site and app traffic increased 37% in the quarter, including triple-digit growth in AI-driven search traffic with the highest conversion rate of any traffic source.
May net sales came in at $24.01 billion, a 14.5% increase from a year earlier, and total company comparable sales for May accelerated to 12.5%, with the U.S. at 13.7%, signaling that the Q3 story did not fade at the quarter’s end.
Analysts Raise Costco Stock Targets After Q3 Despite the Post-Earnings Dip
Costco stock commands 22 positive ratings from covering analysts, with the consensus split between 19 Buys and 3 Outperforms, against 13 Holds and 2 negative ratings.
The mean price target of around $1,082 implies roughly 11% upside from the current price of $975, and the target range runs from $740 on the low end to $1,315 at the high.
The reaction from covering analysts after Q3 was constructive: Bernstein raised its target to $1,194 and Truist raised to $1,011, both noting that the membership engine remains structurally sound even as visible growth in the paid member count has moderated to around 4%.
Bernstein specifically flagged that it will closely monitor membership frequency of transactions as the U.S. market matures, acknowledging that retail media growth is one lever available to offset any near-term softness.
Forward EPS consensus tells the core story: Q3 actual EPS of $4.93 was a 15.2% increase from $4.28 a year earlier, and the next quarter (ending August 2026) carries a consensus estimate of $6.54, implying 11% year-over-year growth for the seasonally strongest period in Costco’s fiscal calendar.
The two-year forward EPS trajectory shows $6.54 in Q4 FY26, $4.82 in Q1 FY27, $5.06 in Q2 FY27, $5.44 in Q3 FY27, and $7.19 in Q4 FY27, a consistent compounding cadence that reflects a business growing earnings in the low-to-mid double digits.
With 19 analysts projecting roughly 11% mean upside at current levels, and the post-Q3 sell-off pulling Costco stock nearly 11% below its 52-week high of $1,097, COST is undervalued relative to the forward earnings trajectory the consensus itself is projecting.
Costco Stock Leads Walmart and BJ’s Wholesale on EPS by a Wide and Widening Margin
Costco stock’s normalized EPS of $4.93 in the quarter ending May 2026 was more than six times Walmart’s (WMT) $0.74 and more than four times BJ’s Wholesale (BJ) $1.16 for the same period.
The forward picture extends that lead: consensus EPS for the quarter ending August 2026 stands at $6.54 for Costco versus $0.68 for Walmart and $1.23 for BJ’s Wholesale, a gap that reflects the structural difference between a pure membership-driven model and conventional retail economics.
Looking out to the quarter ending May 2027, Costco stock’s consensus EPS of $5.44 compares to $0.84 for Walmart and $1.24 for BJ’s Wholesale, and the gap compounds further to the quarter ending August 2027, where Costco reaches $7.19 on the current estimate trajectory.
The competitive implication is direct: the premium Costco stock carries relative to both peers is not a valuation anomaly but a reflection of a qualitatively different earnings engine, one that compounds at a pace neither Walmart nor BJ’s matches on a per-share basis across any period in this dataset.
Is Costco Stock Undervalued in 2026? What the TIKR Model Says
TIKR’s base case values Costco stock at approximately $1,407 by August 2030, implying around 44% total return from the current price of $975, or roughly 9% annualized over the next 4.2 years.
The low case reaches approximately $1,508 by August 2030 (total return around 55%, IRR roughly 5%), built on revenue growing at a 6.6% CAGR, net income margins holding at around 3%, and EPS expanding at roughly 7% annually as the multiple compresses modestly.
The base case — producing that $1,407 target — assumes revenue CAGR of approximately 7%, net income margins at around 3.2%, and EPS growing at roughly 9% annually, with only modest P/E contraction of around 1% per year; this is the scenario where Costco’s 30-warehouse expansion target and the gas-driven loyalty cohort convert to durable membership revenue without a meaningful multiple re-rating.
The high case reaches approximately $2,405 by August 2030 (total return around 147%, IRR roughly 12%) under revenue CAGR of approximately 8%, net income margins near 3.3%, and EPS growing at roughly 10% annually with the P/E holding essentially flat, a scenario that requires both execution on new warehouse openings and acceleration in digital and pharmacy penetration of the kind already visible in the Q3 data.
The risk that breaks the base case is the one Millerchip named on the call: healthcare cost inflation and legal settlements hitting SG&A in ways that offset operating leverage, combined with gas price normalization removing the volume tailwind that inflated Q3 traffic counts.
Is Costco Stock a Buy Right Now?
Costco stock at $975 sits roughly 11% below its 52-week high with the mean analyst target at $1,082 and the TIKR base case pointing toward approximately $1,407 by 2030.
The consensus of 22 positive ratings and EPS growing at 15.2% year over year in Q3 support a buy thesis, with the key variable being whether gas-driven loyalty converts into durable frequency gains in future quarters.
What Do Analysts Say About COST Stock?
Of 37 analysts covering COST, 19 rate it a Buy and 3 an Outperform, with 13 Holds and 2 negative ratings. The mean price target of around $1,082 implies roughly 11% upside from current levels.
Post-Q3, both Bernstein and Truist raised their targets, signaling that the earnings quality was stronger than the headline gross margin compression suggested.
Should You Invest in Costco Wholesale Corporation?
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