Bank of America Raises Costco Target to $1,185 and Names Tesla, GM and Ford Top Auto Picks
Bank of America reinstated Buy coverage on Costco with a $1,185 price target, citing 20% upside and estimating its recent membership fee hike will add $800 million to earnings over two years. In its Auto 2.0 report, it named Tesla, GM and Ford top picks and set Tesla’s target at $460.
1. Bank of America Restores Buy Coverage on Costco
Bank of America reinstated coverage on Costco with a Buy rating and a $1,185 price target, arguing the warehouse chain still offers roughly 20% upside ahead of its upcoming earnings report on March 6.
2. Membership Fee Hike to Add $800 Million to Earnings
Analyst Robert Ohmes underscored Costco’s high-margin membership model, noting the first price increase since 2017 will generate approximately $800 million in additional fee revenue over the next two years, bolstering profitability before merchandise sales.
3. Auto 2.0 Report Emphasizes ICE Profit Streams
The Auto 2.0 framework projects US electric vehicle sales to decline over 20% in 2026 as consumer incentives fade, while internal combustion trucks and SUVs are expected to drive near-term profitability and production growth.
4. Tesla, GM and Ford Named Top Picks
The report singled out Tesla, General Motors and Ford as leading beneficiaries of the Auto 2.0 transition, assigning Tesla a $460 price target based on its leadership in consumer autonomy, robotaxi expansion and energy storage business.