Independent equity research
Is Costco Wholesale (COST) a Buy, Hold or Sell?
Costco Wholesale — our independent, AI-built valuation and rating, in brief.
SELL (reduce into strength)
Fair value
$420.00
12-mo figure
To fair value
−58%
By · report dated 2026-09-30 · fair value derived independently of the market price.
The thesis, in brief
At $924.59 Costco is priced for a 5.8% cost of capital on our cash flows; at our 9.11% WACC it is worth $420, and we expect the de-rating from 55x to 40x forward earnings to continue - wrong if paid-member growth re-accelerates above 5% or FY27 normalized EPS growth tops 12% (we model 8.8%)
How we value it
We value Costco Wholesale using Owner-FCF DCF, 10-yr, member/warehouse/margin drivers; 25/50/25 bear/ours/bull. The fair value (a 12-month figure under the method then in force) is set from that intrinsic estimate first, then compared to the market to read the upside or downside — never anchored to the current price.
What the full report covers
- Business & moat + industry cycle
- Earnings quality & normalized EPS
- Returns on capital (ROIC vs WACC)
- Balance-sheet safety
- Two independent valuations (DCF + multiples)
- Bear / base / bull fair values
- Earnings-call analysis
- Insider activity & positioning
- Technicals (RSI / ADX)
- A falsifiable thesis
Read the full Costco Wholesale report
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