Independent equity research
Is Costco Wholesale (COST) a Buy, Hold or Sell?
Costco Wholesale — our independent, AI-built valuation and rating, in brief.
HOLD (reduce)
12-mo fair value
$864.00
To fair value
−5%
By · report dated 2026-08-14 · fair value derived independently of the market price.
The thesis, in brief
Costco's membership annuity is intact - 92.2% US/Canada renewal, 51.5% of operating profit - but the merchandise operating margin that drove most of the last six years of profit growth just turned negative on a core-on-core basis, and at 42x FY27E the market requires a 5.9% cost of equity to work
How we value it
We value Costco Wholesale using FY28E EPS x justified exit P/E, cross-checked by reverse DCF and a 10-yr FCF DCF at two WACCs. The 12-month fair value 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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