Costco Has Moved Sideways and Down for 1 Year: One Of The Most Respected Wall Street Firms Says 45% Returns Lie Ahead
Costco just posted one of its strongest quarters in years while its stock quietly bled lower for twelve months, and now one of Wall Street's most respected firms sees a setup that almost no one is talking about.
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Shares of Costco (NASDAQ:COST | COST Price Prediction) are trading at $896.48, well below the consensus Wall Street price target of $1,069.20, an implied gap of roughly 19%.
BMO Capital Markets analyst Kelly Bania has the Street-high call at $1,315, implying roughly 47% upside. Costco runs a membership-only warehouse model built on Kirkland Signature private label, high-margin membership dues, and a global footprint of 939 warehouses. Wall Street watches it because that recurring-fee stream behaves more like a subscription business than a traditional retailer.
Costco just posted one of its strongest quarters in years, yet shares have moved sideways to lower for twelve months while the broader market climbed.
What Pulled Costco Lower This Year
Costco is down 4.61% over the past year while the S&P 500 gained 16.06%, a meaningful pocket of underperformance for a name that spent years trading like it could do no wrong. The slide has been slow rather than violent, but a 6.62% one-month drop shows the pressure is fresh and tied to the post-earnings reaction.
The core issue is valuation. Costco trades at a 45 trailing P/E for a company growing revenue in the low double digits. Q4 FY26 beat both lines with EPS of $6.75 topping the $6.5273 consensus and revenue of $95.72 billion beating estimates, but $0.15 of that EPS came from non-recurring IEEPA tariff refunds. Investors treated the underlying number as merely in line, and the stock finished flat on the report.
Why BMO Is Still Calling for Sizable Upside
The bull case that has not cracked centers on membership economics. Membership fee income hit $1.849 billion in Q4, up 7.3% year over year, with a worldwide renewal rate of 89.8% and executive member penetration at 75.6% of sales. Executive members grew 9.4% to 42.3 million, and the under-40 cohort now represents more than a quarter of the base.
BMO’s $1,315 target rests on four pillars: pricing power, high-margin membership renewals, international warehouse expansion runway, and digital growth. Costco added 12 warehouses in Q4 and plans 33 openings in FY27. Digitally enabled comparable sales rose 19.5% and pharmacy sales grew nearly 20%.
Consensus is more measured. Roughly 39 analysts cover the stock, split as follows:
- Strong Buy: 4
- Buy: 19
- Hold: 14
- Sell: 1
- Strong Sell: 1
Recent revisions have skewed higher, with 8 upward EPS revisions versus 4 downward over the trailing 30 days for FY26. The price target range from around $740 to $1,315 shows the sell-side is split on fair value.
Walmart (NYSE:WMT) trades at $107.59 against a target of $127.42, implying about 18% upside with a buy-leaning rating slate.
Target (NYSE:TGT) sits at $156.15 versus a $162.76 target, leaving 4% upside with a hold-tilted rating slate.
BJ’s Wholesale Club (NYSE:BJ) trades at $91.84 with a $105.80 target, roughly 15% upside.
The largest implied upside in the group belongs to Costco if you anchor to BMO’s Street-high, making it the most polarizing setup in the peer group.
Costco by the Data
Costco trades at $896.48 against a consensus target of $1,069.20 and a Street-high of $1,315.
Year to date, COST has gained 4.42% versus the S&P 500’s 12.52%. Over one year, Costco is off 4.61% versus 16.06% for the S&P. Full FY26 revenue reached $303.15 billion, up 10.14%, with EPS of $20.76.
Willing to Own Costco at a Measured Pace
Costco holds its bull case if renewal rates stay above 89%, executive penetration keeps climbing, and international expansion delivers 30 net new warehouses per year. That combination gets the stock back to consensus $1,069, with the BMO $1,315 case layered on top for patient holders.
The thesis weakens if the market refuses to pay 45x earnings once growth normalizes. Excluding tariff refunds, Q4 EPS grew 12.4%. That is strong for a $400 billion retailer, but it does not automatically justify further multiple expansion.
The membership flywheel is intact and the international runway is real. Anyone chasing the BMO call should size for a multi-year holding period rather than a quarterly trade.
Contact [email protected] for any questions or corrections.
Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
