Mizuho believes that Costco’s recent pullback is overdone. The bank added the wholesale retailer to its list of top picks, and upgraded shares to an outperform rating from neutral. It also lifted its price target to $1,000 from $950, which signals a gain of about 17% from Friday’s close. The stock fell about 6% in 2025, while the S & P 500 climbed more than 16%. COST 1Y mountain COST 1Y chart But this type of underperformance is not unprecedented for Costco, with Mizuho pointing to the stock’s pullback in mid-2017. As store volumes ran hot, membership growth subsequently decelerated. However, Costco went on to reaccelerate on all key metrics as its unit growth evened out, analyst David Bellinger wrote. “Shares have corrected ~20% on concerns that both membership and comp sales growth are slowing as part of some underlying change within the COST model,” he wrote. “We push back with: 1) A proprietary store-level analysis indicating roughly half of recent U.S. warehouse openings are ‘fill-ins,’ siphoning demand from high-volume locations and therefore temporarily weighing on membership growth; 2) Trade-up activity is accelerating with Q1 premium member adds 2-3x that of total membership; 3) Domestic renewal rates remain exceptionally high at > 90% and above the 10-year running average.” The analyst added that while near-term investor concerns are valid, they all stem from “having arguably too much consumer demand.” Meanwhile, Bellinger also applauded Costco’s normalizing wage growth. He added that the company could soon receive another catalyst in the form of a special catalyst.
