Costco Price Target Raised to $1,125 on 17bp Margin Gain and 3.1% Traffic Growth
BTIG increased its Costco price target to $1,125 from $1,115 after Q2 gross margin rose by 17 basis points and membership income climbed 14%. Comparable traffic grew 3.1% globally while Costco cut prices on select items and opened four warehouses, bringing its total count to 924.
1. BTIG Raises Price Target
BTIG raised its price target on Costco to $1,125 from $1,115 after the company delivered a Q2 earnings beat, highlighting a 17 basis-point expansion in gross margin and a 14% increase in membership income. The firm maintained its Buy rating, noting healthy traffic and digital performance.
2. Strong Membership Income and Traffic Trends
Costco’s membership income surged 14% as comparable traffic rose 3.1% worldwide, supported by robust in-store and online sales. The company also implemented targeted price cuts on eggs, cheese, coffee and select paper products to pass through easing commodity costs to members.
3. Tariff Mitigation and Expansion Plans
CEO Ron Vachris outlined strategies to limit tariff-driven price increases, including shifting production locations, consolidating global purchasing and boosting Kirkland Signature sourcing. During Q2, Costco opened four new warehouses—one relocation, one new U.S. site and two Canadian business centers—bringing its global total to 924 and targeting 28 net new openings in fiscal 2026.