Key Stats for Costco Stock
- Current Price: $1,028.24
- Target Price (Mid): ~$1,422
- Street Target: ~$1,077
- Potential Total Return: ~38%
- Annualized IRR: ~8% / year
- Earnings Reaction: +1.58% (March 5, 2026)
- Max Drawdown: -19.57% (December 22, 2025)
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What Happened?
Costco Wholesale (COST) has been getting a lot of love from Wall Street lately, and the timing is no coincidence. Ahead of fiscal Q3 earnings on May 28, UBS raised its price target from $1,205 to $1,275 on May 20, keeping its Buy rating. Bernstein raised its target from $1,170 to $1,192 on May 12, reiterating Outperform. Oppenheimer raised its target from $1,100 to $1,160 on May 19, maintaining Outperform and its top pick ranking.
But COST is trading near all-time highs at nearly 50x forward earnings, up roughly 25% year to date, according to Seeking Alpha. Bulls point to one of the most consistent sales machines in retail. Bears point to a multiple that leaves almost no room for error. The real question heading into May 28 is whether the Street’s enthusiasm reflects the fundamentals, or whether it has simply priced in perfection.
The April sales report, released May 6, gave both camps something to work with.
What April’s Sales Data Actually Revealed
According to Costco’s investor relations materials, April net sales came in at $23.92 billion for the four weeks ended May 3, 2026, up 13.0% from $21.18 billion a year earlier. Context matters here. April had one additional shopping day due to the Easter calendar shift, which boosted total and comparable sales by approximately 1.5% to 2%, as Andrew Yoon, Director of Finance and Investor Relations, noted on the pre-recorded sales call.
Strip out that tailwind, gasoline price inflation, and foreign exchange, and adjusted comparable sales were 7.8% for the total company, with digitally enabled comparable sales rising 18.4%. That 7.8% is a meaningful step up from 6.4% in January and 6.2% in March. For the first 35 weeks of fiscal 2026, the adjusted comp sits at 6.5%, with digital comps at 21.1%.
The category detail adds texture that the headline misses. Foods and sundries posted mid-single-digit comps. Fresh foods were up in the high single digits, with meat and deli leading. Non-foods delivered mid-to-high single-digit gains, led by home furnishing, jewelry, and tires. Ancillary business sales surged mid-30s, with gas up low 40s on both price and volume. Worldwide comp traffic was up 4.2%, and average transaction excluding gas and foreign exchange rose 3.4%.
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What Analysts Are Betting On Ahead of May 28
The target raises clustering ahead of Q3 is not random. UBS said Costco is well-positioned to ease investor concerns through the print, citing strong customer demographics, potential traffic upside from incremental fuel visits, and the company’s ability to perform regardless of the macro backdrop. Oppenheimer flagged some near-term fuel margin compression as a risk but kept Costco as its top pick regardless.
Three structural drivers underpin the conviction.
The membership engine remains strong. According to Costco’s Q2 fiscal 2026 earnings release, the company ended Q2 with 82.1 million total paid members, up 4.8% year over year, and 40.4 million executive memberships, up 9.5%. Membership fee income in Q2 reached $1.355 billion, up 13.6% year over year. Because those fees carry very high margins relative to merchandise sales, they contribute disproportionately to Costco’s overall profitability. The U.S. and Canada renewal rate at quarter’s end was 92.1%.
Digital momentum is compounding. Adjusted digitally enabled comparable sales grew 18.4% in April and 21.1% for the first 35 weeks of fiscal 2026. In Q2, ecommerce site traffic rose 32%. Costco is building a digital habit among its membership base, extending its moat into a channel it historically underinvested in.
The tariff narrative has become a differentiator. CEO Ron Vachris said on the Q2 earnings call that Costco intends to be “the first to lower prices and the last to raise them,” a commitment the company says it has already applied to categories including textiles, bedding, and cookware. Its Kirkland Signature private label and scale in supplier negotiations give it a credible pricing defense in an environment where competitors have already raised prices on tariff-affected goods.
What the Valuation Says at $1,028
The enthusiasm is justified by the business. The disagreement is about the price.
At $1,028.24, Costco trades at 48x next twelve months earnings and 29.5x NTM EV/EBITDA, per TIKR data. The Street’s mean target is around $1,077, implying roughly 5% upside. UBS at $1,275 implies nearly 24%. That gap reflects a genuine divide in how investors should think about the setup.
TIKR consensus estimates project revenue growth of around 9% in fiscal 2026 to approximately $299.9 billion. Free cash flow is expected to grow from $7.8 billion in fiscal 2025 to around $8.3 billion in fiscal 2026, and net income margin is forecast to expand modestly from 2.9% to around 3.0%. Analysts see diluted EPS of around $20.56 for fiscal 2026, up from $18.21 in fiscal 2025.
The bear case is straightforward. A 48x forward P/E on a retailer with 11% gross margins and 3% net margins prices in near-flawless execution. EBITDA margins run below 5% even in Costco’s best years. The return profile depends entirely on revenue compounding and multiple resilience. There is no margin expansion lever to pull if comps slow.
The bull case is equally straightforward, and history has repeatedly vindicated it. A 92.1% U.S. and Canada renewal rate means once a household joins, it rarely leaves. The warehouse expansion pipeline targeting 28 net new locations in fiscal 2026 and 30-plus per year thereafter adds proven unit volume. The digital layer is a revenue surface that barely existed three years ago. Bears who waited for Costco to look cheap have consistently missed the compounding.
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TIKR Advanced Model Analysis
- Current Price: $1,028.24
- Target Price (Mid): ~$1,422
- Potential Total Return: ~38%
- Annualized IRR: ~8% / year
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The TIKR mid-case uses a revenue CAGR of around 7% through August 31, 2030. The two primary growth drivers are warehouse unit expansion (28 new locations in fiscal 2026, 30-plus per year thereafter) and digitally enabled comparable sales growth running above 20% through the first 35 weeks of fiscal 2026. The margin driver is net income margin expansion from around 2.9% toward 3.2%, from operating leverage on the membership infrastructure.
The primary risk is multiple compressions. At 48x forward earnings, the mid-case IRR of around 8% per year is a competitive return for a business of this quality, but leaves a limited cushion against a re-rating. The scenario analysis outcome depends heavily on Costco sustaining the comp trajectory and renewal rates it has established over the past several years.
Conclusion
May 28 is the test. Analysts expect fiscal Q3 revenue of approximately $69.6 billion, up around 10% year over year, with diluted EPS of around $4.98. The number to watch most closely is not headline revenue. It is adjusted comparable sales, excluding gasoline and foreign exchange, alongside membership fee income growth.
Adjusted comps ran at 7.8% in April. If Q3 sustains that pace, the bull case holds, and the UBS target range stops looking aggressive. If comps revert toward low single digits, the premium multiple is harder to defend regardless of fuel-price tailwinds. That one data point, due May 28, will tell investors more about whether the Street got this right than any analyst target.
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Should You Invest in Costco?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Costco, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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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!
