Costco’s (COST) shares closed 2% higher on Thursday after Bernstein reaffirmed its bullish view on the wholesale retailer. The equity research firm noted that Costco “has a significant growth runway of another ~50+ years.”
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Costco Has “Stood the Test of Time”
Zhihan Ma, a four-star-rated analyst at Bernstein, reiterated her Buy rating on COST and kept the price target of $1,170, predicting over 15% upside. Ma argued that Costco’s unique business model — which prioritizes self-service warehouses, a curated selection of aggressively priced but high-quality goods, and a deeply committed membership base — “has stood the test of time and translated into consistent earnings power.”
The analyst argued that the retailer’s potential to significantly expand its international presence appears to be underappreciated. Ma believes that the Washington-based company could significantly expand its store base from just over 900 today to more than 2,300 locations, expanding its footprint from 14 countries to 50.
“At the current rate of 25-30 new warehouses per year, this implies Costco has a significant growth runway of another ~50+ years,” Ma added.
Bernstein Flags 7% CAGR in Membership Fee Earnings
Furthermore, the Bernstein analyst contended that such an expansionary move could help fuel a compound annual growth rate (CAGR) of around 7% in Costco’s membership fee income (MFI) over several decades, even as the U.S. market continues to near maximum penetration. Already, MFI accounts for more than half of the retailer’s earnings before interest and tax, the analyst added.
Ma’s bullish commentary comes as Costco continues to expand its revenue. The retailer’s net sales climbed by 9.1% year-over-year to $68.24 billion at the end of the second quarter of fiscal 2026, which ended on February 15.
Is Costco Still a Good Stock to Buy?
Across Wall Street, analysts’ consensus rating on Costco’s shares remains a Moderate Buy. This is based on 16 Buys, five Holds, and one Sell issued by 22 analysts over the past three months.
In addition, the average COST price target of $1,088.05 only implies about 7% upside.
