Key Stats for Costco Stock
- Price change for Costco stock in the last 6 months: -10%
- $COST Stock Price as of Sep. 16: $894
- 52-Week High: $1097
- $COST Stock Price Target: $1072
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What Happened?
Costco (COST) stock is in focus today after Bank of America kept its Buy rating on the company while trimming its price target to $1,095 from $1,200.
Shares fell below $900 on Wednesday. The bank now applies a 48-times multiple to its fiscal 2027 earnings estimate, down from 53 times, citing more caution around margins as supply chain costs rise.
Despite the lower target, Bank of America still expects Costco stock to keep gaining ground.
The bank forecasts Q4 adjusted earnings of $6.52 per share, just under the $6.55 consensus estimate, based on 11.3% sales growth, a 10 basis point dip in gross margin, and 20 basis points of operating expense leverage.
The bank pointed to steady momentum in U.S. sales as a key reason for staying bullish, noting comparable sales excluding gasoline improved to 7.2% in Q4 from 6.8% in Q3.
That trend lines up with what Costco reported for Q3, when comparable sales rose 9.8%, or 6.6% excluding gas price inflation and currency effects.
Total net sales came in at $69.15 billion, up 11.6% from a year earlier, while net income rose 15% to $2.192 billion.
Membership trends also support the bullish case.
Bank of America expects membership growth to settle into a more normal range of 4% to 5% over the medium term, as fewer new Asian warehouse openings and slower digital sign-ups cool the pace.
Costco’s own numbers back this up. The company ended the quarter with 82.9 million paid members, up 4.1% year over year, and 41.2 million paid Executive Memberships, up 9.6%.
Bank of America also flagged potential tariff refunds as a tailwind.
Costco has already begun submitting refund claims tied to IEEPA tariffs and expects to start receiving approved refunds on a rolling basis over the coming months.
The bank believes any refunds could give Costco more room to keep prices competitive.
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What the Market Is Telling Us About Costco Stock
The mix of a lower price target and an unchanged Buy rating suggests analysts still see Costco stock as a solid long-term holding, even as they temper near-term margin expectations.
Bank of America pointed to Costco’s value-focused strategy and its base of higher-income shoppers as reasons the rating remains intact, along with newer perks and continued strength in the Kirkland Signature private label brand.
One more factor could matter for Costco stock in the coming quarters: Bank of America sees room for a special dividend announcement, supported by a projected Q4 cash balance of $20.4 billion.
With Costco management noting on its own earnings call that it continues to generate excess cash beyond its investment priorities, a payout announcement could become a real catalyst investors are watching closely.
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How Much Upside Does Costco Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
