Mizuho believes Costco’s recent exit has gone too far. The bank added the wholesaler-retailer to its top pick list and upgraded the stock’s rating from neutral to outperform. It also raised its price target to $1,000 from $950, implying an upside of about 17% from Friday’s closing price. Stocks fell about 6% in 2025, while the S&P 500 rose more than 16%. COST 1Y Mountain COST 1Y Chart However, this type of slump is not unprecedented for Costco, with Mizuho pointing to a decline in the stock price in mid-2017. Membership growth has since slowed as the number of stores has skyrocketed. However, analyst David Bellinger wrote that Costco continued to reaccelerate across all major metrics as unit sales growth leveled out. “The stock price has corrected by approximately 20% due to concerns that membership and benefits revenue growth are both slowing as part of fundamental changes within the COST model,” he said. “We object on the following grounds: 1) our own store-level analysis showing that approximately half of recent U.S. warehouse openings are “replenishments,” siphoning demand from high-volume stores and therefore temporarily impacting membership growth; 2) Trade-up activity is accelerating as the number of premium members increased by two to three times the total number of members in the first quarter. 3) The domestic renewal rate remains extremely high, exceeding 90% and exceeding the 10-year average. The analyst added that while short-term investor concerns are valid, they are all due to “probably too much consumer demand.” Meanwhile, Bellinger also praised Costco for normalizing its wage growth rate. He added that the company may soon receive another catalyst in the form of a special catalyst.
