Costco Stock Falls Into Correction Territory

Shares of Costco (NASDAQ:COST) have finally entered correction territory, dipping by close to 14% from its all-time highs. Indeed, buying the dip in the beloved bulk-buy retailer has paid off in a big way in the past.

And while the price of admission is still somewhat steep, with shares going for 50.2 times trailing price-to-earnings (P/E) or close to 45 times forward P/E, I still view the $405 billion retail titan as worth consideration. At the end of the day, Costco has the economic resilience and potential to grow further, even as macro headwinds look to weigh consumers down a bit more going into 2026.

Still, with many Magnificent Seven stocks going for quite a bit less than Costco, at least on a P/E basis, it’s tough to draw a line in the sand, especially as Costco expands its footprint while still attracting considerable foot traffic into its stores with must-have products and deals that are too difficult to simply walk by when you’re looking to navigate to the very end of the store where the dairy and meats are tactically located.

Costco to start selling weight-loss drugs. It could be a boon for the shares

Indeed, Costco saw a golden opportunity to start selling some gold bullion at its stores. And it’s been a hit, not only for the warehouse retailing giant, but for early buyers who’ve now seen their investment surge, with gold prices recently eclipsing $4,000 for the very first time. More recently, Costco announced that it will sell weight-loss drugs such as Ozempic and Wegovy.

Indeed, such GLP-1 drugs took the world by storm since their release, and while such drugs have lost much of their initial luster, I still think Costco stands to make a great deal from the move. Reportedly, Novo Nordisk (NYSE:NVO), the firm behind such names as Ozempic and Wegovy, will sell at half price. Indeed, that might be too good a deal for some to pass up. Either way, I think the move is a bigger win for Costco than Novo Nordisk, which has shed close to 60% from its all-time highs hit at the midpoint of 2024.

The big question is how many discount-seeking GLP-1 drug users will sign up for a Costco membership just so they can snag the half-price deal. Time will tell, but such a sweet deal really gives Costco a jolt without the downside risks.

With such profound leverage that very few retailers have, Costco remains a firm with one of the widest economic moats around. Over time, I expect Costco to keep bringing on intriguing, high-upside items in stores at prices that simply cannot be matched elsewhere.

Costco’s longer-term global expansion may still be underestimated

Costco isn’t just a hit in America, it’s a big deal just about anywhere the firm opens up shop. As the firm looks to expand its footprint internationally, I see ample room to raise the bar on sales growth. Perhaps the most bullish thing about Costco’s expansion potential is that a harsh economic climate might not derail its growth plans, as consumers seek to join Costco to save big money on groceries or just about anything else one needs to make themselves feel better as times get tougher.

All considered, Costco is a fantastic company, and whenever you’re granted a 14% discount on shares, I think it’s time to start thinking about doing some buying. The company seems to be doing everything right, and if it can keep members happy with new goods at unbeatable prices, Costco will have little issue dodging and weaving past inflation as it convinces suppliers to give it the lowest possible price for a certain good.