Costco Recommended as One of the Best Stocks by Billionaire Richard Chilton
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 12 hours ago
0mins
Source: Yahoo Finance
- Significant Sales Growth: Costco reported net sales of $24 billion in May, reflecting a 14.5% year-over-year increase, which underscores its strong performance in the retail market and solidifies its market position.
- Annual Sales Performance: For the first 39 weeks of the year, Costco achieved net sales of $221.9 billion, marking a 10% annual growth rate, indicating sustained business growth and stable consumer demand.
- Analyst Rating Maintained: Morgan Stanley reiterated its 'Buy' rating for Costco on May 29, setting a price target of $1,130, emphasizing the importance of its robust supply chain and value proposition in the current economic environment.
- High Market Valuation: Costco's forward P/E ratio stands at 41.84, significantly higher than the market average of 21, yet it is still viewed as a worthwhile investment, reflecting investor confidence in its future growth potential.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 942.240
Low
769.00
Averages
1061
High
1205
Current: 942.240
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Costco's High Membership Loyalty and Steady Performance
- Strong Membership Base: Costco boasts 82.9 million paid memberships serving 149 million cardholders, reflecting its strong appeal and customer loyalty in the retail market, with an impressive renewal rate of 92.2% despite a membership price increase.
- Consistent Revenue Growth: Over the past 33 years, Costco has achieved revenue growth in 32 of those years, with the only exception being a modest 1.5% decline during the 2009 recession, indicating the resilience of its business model amid economic fluctuations.
- Stable Stock Performance: Although Costco's stock trades at a high price-to-earnings ratio of 48, indicating it is not cheap, its low volatility (1-year beta of 0.02) allows it to perform well during market swings, attracting investors seeking stable returns.
- Long Dividend History: With 22 consecutive years of increasing quarterly dividends, Costco demonstrates strong cash flow and profitability, providing substantial returns to investors over the long term and establishing itself as a reliable investment choice.
See More
Costco's Resilience in a Volatile Market
- High Membership Loyalty: Costco currently boasts 82.9 million paid memberships serving 149 million cardholders, and despite a price increase two summers ago, its renewal rate remains impressive at 92.2%, reflecting strong customer loyalty and platform stickiness.
- Stable Revenue Growth: Over the past 33 years, Costco has only experienced one revenue decline, a modest 1.5% during the Great Recession of 2009, demonstrating its resilience amid economic uncertainty with consistent positive growth.
- Consistent Dividend Growth: With 22 consecutive years of quarterly dividend increases, Costco showcases its stable cash flow and profitability, attracting investors despite a high current P/E ratio of 48, indicating long-term value potential.
- Robust Market Performance: Since its IPO in 1993, Costco's stock has appreciated 148-fold, and its one-year beta of just 0.02 indicates a very low correlation with market volatility, making it a suitable investment in a turbulent market environment.
See More
Surge in Protein Demand Strains U.S. Dairy Industry
- Dairy Shortages: The USDA reports that U.S. whey protein inventories have fallen by approximately 50% in 2023, leading to shortages among suppliers for the latter half of the year, indicating a tight market supply-demand situation.
- Price Surge: Whey protein isolate prices have reached $14 per pound, reflecting a spike in demand driven by the rising popularity of GLP-1 weight loss drugs, suggesting that protein consumption will continue to rise in the short term.
- Infrastructure Bottlenecks: As whey is a byproduct of cheese production, existing facilities cannot expand quickly, and the approval for additional filtration infrastructure can take years, limiting the supply chain's capacity to grow.
- Market Investment Opportunities: Major dairy companies like Dairy Farmers of America and Saputo are expected to be the first to increase capacity, and while current high prices may moderate in the coming years, it will take time for the market to adjust.
See More
Costco Outperforms Market in 2026 with Strong Membership Growth
- High Renewal Rate: Costco boasts a 92.2% renewal rate for its membership in the U.S. and Canada, which not only drives predictable, high-margin revenue but also reflects strong customer loyalty, a metric that many subscription businesses would envy.
- Significant Revenue Growth: The third-quarter 2026 report indicates a 10.7% year-over-year increase in membership fee income to $1.37 billion, with these high-margin revenues funding aggressive price investments that enhance the company's competitive position.
- Aggressive Expansion Plans: Management aims to open over 30 new warehouses annually, with international expansion accelerating in markets like China, Spain, France, and Canada, which will further drive sales growth and market share.
- High Returns on Tech Investments: Costco's tech upgrades enable members to receive same-day delivery in under 45 minutes, while AI-powered product pages are generating triple-digit traffic growth, demonstrating that the company's investments in technology are yielding substantial business returns.
See More
Costco Stock Price High but Optimistic Outlook Ahead
- Strong Market Performance: Costco's stock is currently priced at $954 per share, which, while appearing expensive compared to competitors like Walmart and Target, reflects a robust market confidence with a market cap of $418 billion, indicating strong investor support.
- Optimistic Analyst Ratings: Wall Street holds an average buy rating on Costco, with a price target 14% above current levels, suggesting a generally positive outlook for its future performance, while the short-selling ratio remains low at 1.8%, indicating investor confidence.
- Membership Revenue Growth: As of Q3 2026, Costco's membership fee income rose 10.7% to $1.37 billion, with nearly 100% gross margins providing substantial funding for aggressive pricing strategies, enhancing its competitive edge.
- Global Expansion Strategy: Costco aims to open over 30 new warehouses annually, with accelerated growth in international markets such as China, Spain, France, and Canada, coupled with technology upgrades that enable same-day delivery, further enhancing customer experience and sales.
See More
Costco Stock Price High but Optimistic Outlook Ahead
- Strong Membership Renewal Rate: Costco boasts a 92.2% renewal rate among its U.S. and Canadian members, which not only reflects customer loyalty but also contributes to a 10.7% increase in membership fee income, reaching $1.37 billion, showcasing its pricing power and profit potential in a competitive retail landscape.
- Analysts Generally Bullish: Wall Street holds an average buy rating on Costco, with a price target 14% above current levels, indicating strong market confidence in its future growth despite the seemingly high stock price, as short-sellers account for only 1.8% of shares, reflecting trust in its continued performance.
- Global Expansion Plans: Costco aims to add over 30 new warehouses annually, particularly accelerating growth in international markets like China, Spain, France, and Canada, indicating a strategic positioning that will enhance market share and revenue streams globally.
- Significant Returns from Tech Investments: Costco's technology upgrades have enabled same-day delivery for members, and AI-driven product pages have generated triple-digit traffic growth, which not only enhances customer experience but also lays a foundation for future business growth, demonstrating the success of its investments in technology.
See More
Costco's High Membership Loyalty and Steady Performance
- Strong Membership Base: Costco boasts 82.9 million paid memberships serving 149 million cardholders, reflecting its strong appeal and customer loyalty in the retail market, with an impressive renewal rate of 92.2% despite a membership price increase.
- Consistent Revenue Growth: Over the past 33 years, Costco has achieved revenue growth in 32 of those years, with the only exception being a modest 1.5% decline during the 2009 recession, indicating the resilience of its business model amid economic fluctuations.
- Stable Stock Performance: Although Costco's stock trades at a high price-to-earnings ratio of 48, indicating it is not cheap, its low volatility (1-year beta of 0.02) allows it to perform well during market swings, attracting investors seeking stable returns.
- Long Dividend History: With 22 consecutive years of increasing quarterly dividends, Costco demonstrates strong cash flow and profitability, providing substantial returns to investors over the long term and establishing itself as a reliable investment choice.
See More
Costco's Resilience in a Volatile Market
- High Membership Loyalty: Costco currently boasts 82.9 million paid memberships serving 149 million cardholders, and despite a price increase two summers ago, its renewal rate remains impressive at 92.2%, reflecting strong customer loyalty and platform stickiness.
- Stable Revenue Growth: Over the past 33 years, Costco has only experienced one revenue decline, a modest 1.5% during the Great Recession of 2009, demonstrating its resilience amid economic uncertainty with consistent positive growth.
- Consistent Dividend Growth: With 22 consecutive years of quarterly dividend increases, Costco showcases its stable cash flow and profitability, attracting investors despite a high current P/E ratio of 48, indicating long-term value potential.
- Robust Market Performance: Since its IPO in 1993, Costco's stock has appreciated 148-fold, and its one-year beta of just 0.02 indicates a very low correlation with market volatility, making it a suitable investment in a turbulent market environment.
See More
Surge in Protein Demand Strains U.S. Dairy Industry
- Dairy Shortages: The USDA reports that U.S. whey protein inventories have fallen by approximately 50% in 2023, leading to shortages among suppliers for the latter half of the year, indicating a tight market supply-demand situation.
- Price Surge: Whey protein isolate prices have reached $14 per pound, reflecting a spike in demand driven by the rising popularity of GLP-1 weight loss drugs, suggesting that protein consumption will continue to rise in the short term.
- Infrastructure Bottlenecks: As whey is a byproduct of cheese production, existing facilities cannot expand quickly, and the approval for additional filtration infrastructure can take years, limiting the supply chain's capacity to grow.
- Market Investment Opportunities: Major dairy companies like Dairy Farmers of America and Saputo are expected to be the first to increase capacity, and while current high prices may moderate in the coming years, it will take time for the market to adjust.
See More
Costco Outperforms Market in 2026 with Strong Membership Growth
- High Renewal Rate: Costco boasts a 92.2% renewal rate for its membership in the U.S. and Canada, which not only drives predictable, high-margin revenue but also reflects strong customer loyalty, a metric that many subscription businesses would envy.
- Significant Revenue Growth: The third-quarter 2026 report indicates a 10.7% year-over-year increase in membership fee income to $1.37 billion, with these high-margin revenues funding aggressive price investments that enhance the company's competitive position.
- Aggressive Expansion Plans: Management aims to open over 30 new warehouses annually, with international expansion accelerating in markets like China, Spain, France, and Canada, which will further drive sales growth and market share.
- High Returns on Tech Investments: Costco's tech upgrades enable members to receive same-day delivery in under 45 minutes, while AI-powered product pages are generating triple-digit traffic growth, demonstrating that the company's investments in technology are yielding substantial business returns.
See More
Costco Stock Price High but Optimistic Outlook Ahead
- Strong Market Performance: Costco's stock is currently priced at $954 per share, which, while appearing expensive compared to competitors like Walmart and Target, reflects a robust market confidence with a market cap of $418 billion, indicating strong investor support.
- Optimistic Analyst Ratings: Wall Street holds an average buy rating on Costco, with a price target 14% above current levels, suggesting a generally positive outlook for its future performance, while the short-selling ratio remains low at 1.8%, indicating investor confidence.
- Membership Revenue Growth: As of Q3 2026, Costco's membership fee income rose 10.7% to $1.37 billion, with nearly 100% gross margins providing substantial funding for aggressive pricing strategies, enhancing its competitive edge.
- Global Expansion Strategy: Costco aims to open over 30 new warehouses annually, with accelerated growth in international markets such as China, Spain, France, and Canada, coupled with technology upgrades that enable same-day delivery, further enhancing customer experience and sales.
See More
Costco Stock Price High but Optimistic Outlook Ahead
- Strong Membership Renewal Rate: Costco boasts a 92.2% renewal rate among its U.S. and Canadian members, which not only reflects customer loyalty but also contributes to a 10.7% increase in membership fee income, reaching $1.37 billion, showcasing its pricing power and profit potential in a competitive retail landscape.
- Analysts Generally Bullish: Wall Street holds an average buy rating on Costco, with a price target 14% above current levels, indicating strong market confidence in its future growth despite the seemingly high stock price, as short-sellers account for only 1.8% of shares, reflecting trust in its continued performance.
- Global Expansion Plans: Costco aims to add over 30 new warehouses annually, particularly accelerating growth in international markets like China, Spain, France, and Canada, indicating a strategic positioning that will enhance market share and revenue streams globally.
- Significant Returns from Tech Investments: Costco's technology upgrades have enabled same-day delivery for members, and AI-driven product pages have generated triple-digit traffic growth, which not only enhances customer experience but also lays a foundation for future business growth, demonstrating the success of its investments in technology.
See More
