These Analysts Revise Their Forecasts On Costco After Q4 Results

Costco Wholesale Corp (COST) reported better-than-expected Q4 2025 financial results, with revenue reaching $86.16 billion and adjusted EPS at $5.87, both surpassing analyst estimates. Membership fees rose to $1.72 billion, bolstered by a $5 annual fee increase implemented in September 2024, the first since 2017. Despite the strong performance, COST shares declined 2% on Friday, prompting mixed analyst reactions with some price targets lowered (JPMorgan, Truist) and one raised (Bernstein).

Analysis

Costco Wholesale Corp. reported a solid fourth-quarter for fiscal 2025, with both revenue and earnings per share modestly exceeding analyst expectations. Revenue reached $86.16 billion, narrowly beating the $86.12 billion consensus, while adjusted EPS of $5.87 surpassed the forecast of $5.80. A key highlight was the significant growth in membership fees, which rose to $1.72 billion from $1.51 billion in the prior-year quarter, directly reflecting the successful implementation of a $5 annual fee increase in September 2024—the company's first such hike since 2017. Despite these positive fundamentals, the market's reaction was negative, with shares falling 2% to $925.03. This disconnect suggests investor expectations may have been set even higher, or that the narrow revenue beat was perceived as underwhelming. The subsequent analyst price target revisions are mixed and reflect this cautious sentiment; while ratings from JP Morgan and Bernstein remain bullish (Overweight, Outperform), both JP Morgan and Truist Securities lowered their price targets, indicating a potential recalibration of valuation expectations in the near term.

Key Decisions for Investors

• Investors should scrutinize the valuation, as the 2% share price decline despite positive earnings and revenue beats suggests the market had priced in even stronger results or is concerned about future growth.
• Note the cautious recalibration from analysts; while ratings remain generally positive, the lowering of price targets by major firms like JP Morgan and Truist indicates that near-term upside may be more limited than previously anticipated.
• The robust growth in high-margin membership fee income remains a core strength, but investors should weigh this fundamental positive against the negative short-term market reaction and mixed analyst outlook.