Costco (COST) Stock Forecast & Price Target

Costco Wholesale has demonstrated strong financial performance, with key metrics indicating a positive outlook; notably, the average ticket increased by 3.0%, alongside robust same-day delivery growth in partnership with major services. The retail gross margin expanded to 11.32%, driven by improved product margins across major categories, while membership fee income surged by 14% to $1.33 billion, exceeding expectations. Additionally, ancillary sales continued to accelerate, marking consistent monthly growth and reflecting Costco's effective strategy in enhancing revenue streams.

Costco Wholesale's stock outlook appears negative due to several key financial indicators, including a slight decline in worldwide membership renewal rates, which fell to 89.7% from the previous period, and a reduction in the U.S. and Canada rate to 92.2%. Additionally, the company's plans to open fewer new clubs in FY26, with 28 net new locations projected down from 30, signal a potential slowdown in growth, alongside a deceleration in traffic and comparable store sales growth to 3.0% and 6.0%, respectively. The firm also faces increased operational pressures, evidenced by a one basis point deleverage in the SG&A expense ratio attributed to rising costs in wages and healthcare, while core comps continue to slow due to prior store openings cannibalizing sales.