Costco Wholesale (COST) – Setup for Sales and Earnings Reacceleration
Costco (COST) trades around $978, and we think the stock is setting up for a potential reacceleration in both sales and earnings as it moves through 2026.
Over the past year, shares are up about 5%, but performance in calendar 2025 has been choppier. U.S. comparable sales excluding gas slowed from +9.2% in January 2025 to +5.5% in October and +5.8% in November. That deceleration has weighed on the stock and helped create what looks like a more attractive setup going forward.
What stands out to us is the timing. As Costco begins to lap easier year-over-year comparisons starting in May, comps could reaccelerate back toward the company’s typical 7% to 8% range. That kind of improvement would likely support renewed upside in both revenue and earnings growth.
Core demand trends also remain healthy, particularly in general merchandise, which suggests the slowdown has more to do with tough comparisons than weakening fundamentals. That’s an important distinction for a retailer with Costco’s scale and loyal customer base.
The company is set to report earnings next Wednesday, making this a key near-term catalyst. A strong report or positive forward commentary could shift sentiment quickly.
Analyst Simeon Gutman has a $1,130 price target, which implies roughly 15% upside from current levels. While Wall Street is somewhat mixed, the majority of analysts remain constructive, with 25 out of 38 rating the stock Buy or Strong Buy.
With easier comps ahead, solid underlying demand, and a major earnings report around the corner, Costco looks positioned for a potential rebound phase in 2026.
