Costco (COST) Stock Forecast & Price Target

Costco Wholesale has demonstrated strong financial performance, evidenced by a 4.2% increase in average ticket size, coupled with a robust 18.9% growth in digitally-enabled comparable sales, reflecting the company's ability to adapt to consumer demands for value. The company is expected to maintain a double-digit EPS growth rate in FY26 due to solid same-store sales growth, approximately 10% growth in membership fees, and effective cost management strategies. Additionally, Costco benefits from high membership renewal rates, with around 93% in the U.S. and Canada, which supports its stable revenue generation and reinforces its position as a profitable market share gainer.

Costco Wholesale is facing several concerning trends that contribute to a negative outlook on its stock, including declining renewal rates, which have decreased to 89.7% globally and 92.2% in the US and Canada, down from recent highs. Additionally, there is a slowdown in paid members, potentially leading to a negative sequential quarter, coupled with decelerating year-over-year comparable traffic. With key metrics weakening amidst increasing competition and trading at a high valuation of 27x EV/NTM EBITDA, even minor disappointments may result in a re-rating of the stock.