Costco: Durable Comp Momentum, Omni-Channel Strength, and Margin Expansion Support Buy Rating

William Blair analyst Phillip Blee has maintained their bullish stance on COST stock, giving a Buy rating yesterday.

Phillip Blee has given his Buy rating due to a combination of factors that underscore Costco’s durable growth and earnings power. He points to the company’s ability to post strong comparable sales in January despite difficult prior-year comparisons and a calendar headwind from the Lunar New Year shift, with multiyear stacked comps holding near peak levels last seen when the stock was at record highs. Blee also notes that both essential categories like grocery and fresh food and more discretionary general merchandise are growing solidly, while digitally enabled sales surged far above their typical pace, validating Costco’s progress in e‑commerce and omni‑channel capabilities.

Blee highlights that traffic continues to rise steadily, and average ticket size has improved, reversing a multi‑year pattern of more modest growth, which suggests healthier underlying demand and potentially higher-margin mix. The strong January performance, following a robust holiday season, boosts his confidence that Costco can sustain mid-single-digit comparable sales growth even as it cycles very strong results in the near term. Based on this momentum, he raises his sales and earnings estimates and expects investors to increasingly factor in further comp acceleration in the back half of the year as comparisons ease. Combined with anticipated earnings growth and margin expansion as the company anniversaries last year’s sizable wage increase, these dynamics support his view that the stock should continue to perform well, justifying a Buy rating.

Blee covers the Consumer Cyclical sector, focusing on stocks such as Yeti Holdings, Somnigroup International, and Driven Brands Holdings. According to TipRanks, Blee has an average return of 21.7% and a 64.94% success rate on recommended stocks.

In another report released yesterday, Bernstein also maintained a Buy rating on the stock with a $1,146.00 price target.