Why Some Experts Think 'Defensive' Investors Could Lift Costco Stock Back Toward Records

Key Takeaways

• Costco shares rose Friday after the warehouse retailer beat estimates in its latest quarterly results.
• Analysts said following the report that Costco stock could be in for gains this year if the retailer continues its recent trend of performance.

Costco Wholesale’s (COST) latest earnings beat estimates, giving its stock a lift. But what’s next for the retailer’s shares, which haven’t done much over the past year?

The warehouse retail giant said late Thursday it earned $4.58 per share in its fiscal second quarter, on revenue of $69.6 billion. That was better than the Street expected: Analysts had forecast earnings per share of $4.51 with sales of $69.1 billion, per estimates compiled by Visible Alpha.

Costco’s shares were up 1% in recent trading on an off day for markets. But they’re down slightly in the last 12 months despite the company posting consistently solid results. Some analysts, however, think there could be more gains ahead after a 15% rally to start this year as investors have flocked to defensive consumer-focused stocks.

Why This Matters to Investors

Costco shoppers have proven loyal to the retailer. Its shares, meanwhile, are about 8% below their early 2025 record of nearly $1,077, with an average analyst price target $40 shy of that record high.

JPMorgan analysts said Costco’s sales and margin growth continues to improve at a faster rate than other retailers, and said the debate for investors “as it often is, stands on valuation and when (not if) to buy” the retailer’s shares. The analysts kept an “overweight” rating on the stock, lifting their price target by $10 to $1,060, in line with a Street consensus that is about 9% above Thursday’s close.

William Blair analysts said they see Costco as “well suited to find investor support as a consistent, defensive consumer name in an increasingly uncertain consumer environment,” and said Costco is well-positioned to potentially offer a special dividend or increase its buybacks, which could boost the stock.

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The outstanding question of tariff refunds may also effect Costco this year. The retailer was among the companies to sue the Trump administration over its tariffs last year, and asked a court for a refund if the tariffs were struck down, which happened last month.

CEO Ron Vachris said during Thursday’s earnings call that it is uncertain if or when Costco could receive a tariff refund. The company plans to pass the recovery of those costs on to consumers through lower prices if it does receive one, according to an transcript provided by AlphaSense.

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