BofA Reinstates Buy on Costco with $1,185 Target Citing Pricing Strength
BofA reinstated coverage of Costco with a Buy rating and a $1,185 price target, citing its industry-leading pricing and appeal among higher-income members. Costco raised its quarterly dividend to $1.30 in April and has delivered 18.33% stock gains so far in 2026 with a 0.5% yield.
1. BofA Reinstates Coverage
On February 27, BofA reinstated coverage of Costco with a Buy rating and set a $1,185 price target. The firm highlighted Costco’s industry-leading pricing strategy, exemplified by its long‐standing $4.99 rotisserie chicken, and its strong appeal among higher-income consumers driving membership loyalty.
2. Dividend Policy and Stock Performance
Costco increased its quarterly dividend to $1.30 per share in April, marking the latest raise in a two-decade streak of annual increases and periodic special payouts. The stock has gained 18.33% year-to-date and currently yields 0.5%, underscoring its reputation as a defensive retail name.
3. Tax Season and Consumer Demographics
Analysts point to Costco’s demographic positioning and merchandise mix as key drivers for tax-season spending, with higher-income members expected to benefit most from refunds. This combination of pricing consistency and big-ticket assortment positions Costco to capture incremental consumer demand across economic cycles.