Costco (COST) Stock Edges Higher After RBC Calls It ‘One of the Best Stories in Retail’

TLDR

• RBC Capital analyst Steven Shemesh initiated coverage of COST with a Hold rating and a $1,000 price target, citing ~9% upside
• Shemesh praised Costco’s bulk-buying model, strong merchandising, and growing e-commerce business
• He warned that most of Costco’s advantages are already priced in, and expects membership growth to slow
• Institutional investor Ghe LLC increased its COST stake by 121.8% in Q1, bringing its holding to 13,601 shares worth ~$13.55 million
• Wall Street’s consensus remains “Moderate Buy” with an average price target of ~$1,061–$1,095, implying up to 19% upside

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Costco (COST) stock edged up 0.84% on Monday after RBC Capital called it “one of the best stories in retail” — even while slapping a Hold rating on it. The stock opened at $916.25, well below its 52-week high of $1,096.50.

Costco Wholesale Corporation, COST

RBC analyst Steven Shemesh kicked off coverage with a $1,000 price target. That implies roughly 9% upside from current levels — respectable, but not exactly a rallying cry.

Shemesh praised Costco’s bulk-price model and what he called “strong merchandising.” He also pointed to growing digital sales as a path to modest margin expansion. In short: he likes the business, but thinks the market already knows it.

The core of his caution is valuation. Most of Costco’s strengths — its loyal membership base, its pricing power, its e-commerce runway — are already baked into the stock price, he argued. At a PE ratio of 46.09, the market is paying a premium. Shemesh thinks that’s fair, but hard to stretch further.

He also flagged a slowdown coming in paid membership growth and subscription renewal rates. Those are key metrics for Costco’s business model, so any softening there matters.

Institutional Activity

Ghe LLC increased its COST position by 121.8% in Q1, adding 7,468 shares to reach 13,601 total — worth about $13.55 million. That makes COST the firm’s fourth-largest holding at 2.9% of its portfolio.

Other firms are moving in smaller amounts. Manning & Napier Advisors grew its stake by 750%, though it only owns 34 shares. Several new positions were opened in Q4 by firms including Gunpowder Capital Management and Mcguire Capital Advisors. Institutional investors now hold 68.48% of the stock.

On the insider side, Director Kenneth D. Denman sold 885 shares on June 23rd at an average price of $957.45, totaling $847,343. That reduced his stake by 15.62%.

What the Rest of Wall Street Says

The broader analyst picture is more bullish than RBC. Of analysts who have rated the stock in the past three months, 14 say Buy, eight say Hold, and one says Sell — a “Moderate Buy” consensus.

Price targets vary. JPMorgan lowered its target slightly from $1,110 to $1,100 but kept an Overweight rating. Bank of America raised its target to $1,200 with a Buy. Goldman Sachs lifted its target to $1,159. BTIG set a $1,125 target. TD Cowen sits at $1,175.

The average target across Wall Street comes in around $1,061–$1,095, depending on the data source — implying up to 19% upside from current trading levels.

Costco’s most recent quarter showed EPS of $4.93, just a penny below the $4.94 consensus. Revenue came in at $70.53 billion, beating estimates of $70.12 billion.

The company declared a quarterly dividend of $1.47 per share, payable August 7 to shareholders of record on July 24. Annualized, that’s $5.88 per share, yielding about 0.6%.

Costco also recently expanded its digital wallet feature, which could speed up checkout for members.