With a market cap of $418.8 billion, Costco Wholesale Corporation (COST) operates membership warehouses and e-commerce websites focused on offering a limited selection of branded and private-label products at low prices. Its high sales volumes, rapid inventory turnover, and efficient purchasing and distribution model allow it to operate profitably with lower gross margins. Shares of the warehouse club giant have lagged behind the broader market over the past 52 weeks.
COST stock has fallen 5.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.9%. Moreover, shares of the company are up 9.1% on a YTD basis, compared to SPX's 12.9% gain. Dear Intel Stock Fans, Mark Your Calendars for August 12 Ahead of Nebius Earnings, Here's What Barchart Data Says Comes Next for NBIS Stock Nvidia's Best Customers Have a Reason to Stop Buying So Many Nvidia Chips Tired of missing midday reversals?
The FREE Barchart Brief newsletter keeps you in the know. Zooming in further, shares of the Issaquah, Washington-based company have underperformed the State Street Consumer Staples Select Sector SPDR ETF's (XLP) 2.4% return over the past 52 weeks. Costco Wholesale has underperformed due to slowing sales growth and weaker momentum.
The boost from high gasoline prices has faded as fuel prices declined, reducing traffic from value-seeking shoppers. Investors are also concerned about membership saturation, rising expenses and tariff uncertainty, which could pressure margins. For the fiscal year ending in August 2026, analysts expect Costco Wholesale's EPS to grow 13.5% year over year to $20.42.
The company's earnings surprise history is promising. It beat the consensus estimates in three of the last four quarters. Among the 36 analysts covering the stock, the consensus rating is a "Moderate Buy." That's based on 19 "Strong Buy" ratings, four "Moderate Buys," 12 "Holds," and one "Strong Sell." This configuration has remained unchanged over the three months.
On May 20, UBS raised Costco Wholesale's price target to $1,275 and maintained a "Buy" rating. The mean price target of $1,101.12 represents a 16.6% premium to COST's current price levels. The Street-high price target of $1,315 suggests a 39.3% potential upside.
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