Costco (COST) is among the leading retailers investors pay the closest attention to right now. There’s good reason for this. With one of the biggest footprints in North America and a membership model that provides excellent free cash flow growth, this is a retailer with one of the most unique moats around its underlying business that’s led to incredible stock price appreciation over time.
As the chart above shows, it’s been a rocky few months for this top-tier blue-chip retail stock. Dipping to a low around $850 per share late last year and into the beginning of 2026, COST stock has since rebounded toward the $1000 level (currently trading just above this key psychological threshold). As such, it’s clear many investors are starting to pay attention to the bullish narrative around Costco, which includes key factors such as digital growth, customer loyalty, and future growth strategies the company’s management team is implementing.
Let’s dive into what to make of this bullish assessment of COST and whether this retail stock can continue to climb into the end of this year (and for years to come).
I think it’s important to start this discussion around the bull case for Costco’s stock with commentary around what’s ailing the company. I think most of the recent downturn in COST stock has to do with the ultra-premium multiple the market has granted Costco.
Trading at nearly 50 times forward earnings, Costco is certainly among the most expensive growth stocks in the market right now. Indeed, for a retailer, this multiple is one that’s almost unheard of.
Again, it’s Costco’s premium membership model, its value, quality, and fresh merchandise, and a customer base that’s among the most loyal in the shopping world that are driving this multiple. Member numbers have been very consistent and resilient, with many market participants seemingly happy to pay this multiple with the knowledge that there’s some recession-resistant upside over the long term.
Now, past earnings results did show strong performance on all lines, with the company’s fuel business continuing to shine bright. Given the surge in gasoline prices we’re seeing of late, Costco’s below-market pricing for its gas stations at most locations provides an apparent thesis for investors to grasp onto. More consumers seeking discounts on gas will continue to flock to Costco and drive foot traffic volume within its stores. It’s that consistent and stable loss-leader strategy that has so many consumers coming back for more, and it’s one key reason I’m personally a member.
