Why Costco (COST) is a Top Growth Stock for the Long-Term

Zacks rates Costco (COST) #2 (Buy), with a B VGM score and an A Growth Style Score, and forecasts 11% year-over-year earnings growth for the current fiscal year. For fiscal 2027, 13 analysts raised estimates over the past 60 days, lifting the consensus EPS estimate by $0.19 to $22.70; Costco’s average earnings surprise is +1.2%. The article presents the stock as a long-term growth idea and reports no new company announcement or market reaction.

Analysis

The signal here is estimate momentum, not a new operating catalyst. A small upward consensus revision can support near-term sentiment, but it does not establish that Costco’s sales mix, membership economics, or merchandise margins are improving; the article’s score-based framing is promotional and provides no valuation context. Near term, the likely effect is limited unless revisions broaden or upcoming results validate stronger underlying demand. Over 1–3 months, watch comparable sales excluding gasoline and foreign exchange, renewal trends, traffic, and gross-margin commentary. If value-seeking shoppers trade down, Costco may gain share from Walmart, Target, and BJ’s Wholesale, while intensifying price competition could pressure retailers’ margins and strengthen Costco’s leverage with suppliers. Over 6–18 months, scale and member loyalty remain potential advantages, but international growth and e-commerce execution should be judged on returns, not footprint alone. The key contrarian point: a defensive, trusted retailer can still disappoint as an investment if expectations or the multiple already discount durable growth; the supplied material does not establish either valuation or adequate upside. Falsifiers include decelerating comparable sales or renewal indicators, weaker earnings revisions, or guidance showing price investment is eroding profitability.

Key Decisions for Investors

• Do not add on this article alone. Treat the estimate revisions as a watch signal; verify current valuation, revision breadth, and the next earnings report before sizing a long in COST.
• For an existing position, retain exposure only while comparable-sales trends, membership indicators, and earnings expectations remain intact; reassess on a material guidance cut or sustained deterioration in those measures.
• Monitor Walmart, Target, and BJ’s Wholesale results for evidence of share shifts and price-led margin pressure. A relative long-COST/short-peer expression is only warranted if operating data confirms Costco is taking share and valuation does not overwhelm the earnings advantage.