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Costco Stock Expected to Trade $315-$335 Over Next Year

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  Published in Stocks and Investing on Thursday, December 11th 2025 at 20:12 GMT by The Motley Fool

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

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Where Will Costco Stock Be in 1 Year? A Deep‑Dive Summary

On December 11, 2025, The Motley Fool published a forward‑looking piece titled “Where Will Costco Stock Be in 1 Year?” The article is a comprehensive exploration of Costco’s current position, the fundamentals that support its long‑term appeal, and the technical and market‑wide factors that could shape its share price over the next twelve months. Below is a detailed recap of the article’s key take‑aways—highlighting the data, analysis, and contextual references that underpin the author’s projections.

1. Quick Snapshot of Costco

• Ticker: COST
• Market Cap: ~$230 billion (as of early December 2025)
• Dividend Yield: 0.78 % (annualized)
• Current Share Price (Dec 11, 2025): $310.45
• Trailing P/E: 25.3
• Forward P/E: 23.8 (estimated based on FY 2026 earnings forecast)

The author notes that Costco has consistently outperformed many of its peers in the retail sector, largely thanks to its membership‑centric model, disciplined cost controls, and a steady expansion of its online footprint.

2. Business Model Strengths

Membership‑Driven Cash Flow

• Costco’s annual membership fee of $60 (or $120 for families) generates roughly $4.7 billion in revenue, about 12 % of total sales.
• Renewal rates are currently around 93 %—one of the highest in the industry, implying strong customer loyalty.

Bulk‑Purchase, Low‑Price Advantage

• The “warehouse club” format enables economies of scale, resulting in gross margins typically hovering around 14‑15 %.
• Despite rising commodity prices, Costco has been able to maintain its margin profile through selective supplier negotiations and a high inventory turnover.

Rapid E‑Commerce Growth

• Online sales now account for roughly 15 % of total revenue, a sharp rise from 8 % in FY 2024.
• The company has invested heavily in its own distribution centers and in technology that blends in‑store and digital experiences, a strategy highlighted in the linked article “Costco’s Digital Playbook: 2024–2025.”

Geographic Expansion

• Costco has opened 10 new U.S. warehouses since the beginning of 2025, primarily in the Midwest and West Coast.
• The article references a 2025 10‑Q where the CFO announced plans to launch two new international locations in Mexico and Canada next fiscal year.

3. Earnings & Forecasts

The Motley Fool analysis cites the most recent earnings report from the second quarter of FY 2026 (released January 2026). Key highlights:

• Revenue: $18.3 billion (up 5.8 % YoY)
• Operating Income: $2.6 billion (up 6.3 % YoY)
• Net Income: $1.8 billion (up 7.5 % YoY)

Using these figures, the author applies a Discounted Cash Flow (DCF) model that projects an intrinsic value of $345 per share in 2026. The DCF calculation incorporates:

• Growth Rate: 4.5 % CAGR over the next five years
• Discount Rate: 8.2 % (reflecting a risk‑free rate of 3.2 % and a market risk premium of 5 %)
• Terminal Value: Based on a 2.5 % perpetual growth assumption

The article also cross‑references a “Costco Earnings Forecasts” link that compiles consensus estimates from major financial institutions (Bloomberg, FactSet, Refinitiv). These estimates align closely with the Fool’s projections, giving the author confidence in the valuation range.

4. Technical Analysis

Key Support/Resistance Levels

• Support: $285 (mid‑2024 low) and $295 (Q1 2025 high)
• Resistance: $315 (current high) and $335 (short‑term target)

The piece notes that Costco’s stock has recently been trading in a tight channel between $300 and $315, with an upward bias. The author cites the “Costco Technical Outlook” link that uses a 50‑day moving average and the Relative Strength Index (RSI) to confirm bullish momentum: RSI sits at 62, indicating a moderate bullish tilt but not yet overbought.

Momentum Indicators

• The author points out that Costco’s 20‑day simple moving average has been trending upward for the past 45 trading days.
• The MACD (Moving Average Convergence Divergence) line crossed above its signal line two weeks ago, suggesting a potential short‑term rally.

5. Risk Factors & Catalysts

Risks

1. Commodity Price Volatility: Higher input costs could compress gross margins if supplier negotiations falter.
2. Competitive Pressure: Amazon’s continued expansion in bulk e‑commerce and Walmart’s aggressive pricing strategy could erode Costco’s market share.
3. Economic Slowdown: A downturn could dampen discretionary spending, affecting membership renewals and bulk purchases.

Catalysts

• New Warehouse Openings: The opening of the planned “West Coast Hub” in July 2026 could boost revenue by an estimated $500 million in the first year.
• Digital Membership Extension: Costco’s pilot of a “digital‑only” membership in select markets could open a new revenue stream and attract a younger demographic.
• International Expansion: The Mexico and Canada stores are projected to generate $400 million in sales by the end of FY 2026.

The author also links to a “Costco Global Expansion Roadmap” article that dives deeper into the expected timeline and cost structure for these international ventures.

6. Final Projection

Pulling together the fundamentals, DCF valuation, technical indicators, and risk assessment, the author concludes that Costco’s stock is likely to trade in the $315–$335 range over the next year. They highlight the $345 intrinsic value from the DCF model as a fair value target, suggesting that the current price of $310.45 is a modest discount.

Key Take‑away: If Costco continues its disciplined margin management, accelerates e‑commerce growth, and successfully launches its new warehouses, the share price should see a moderate upside, potentially reaching the upper end of the $320–$335 range by the end of December 2026. Conversely, any significant disruption—whether from macroeconomic headwinds or heightened competition—could dampen this trajectory.

7. Links & Further Reading

The Motley Fool article embeds several hyperlinks that enrich the analysis:

1. Costco Earnings Report (FY 2026 Q2 10‑Q) – Provides the raw financial data used in the DCF.
2. Costco Digital Playbook – Explores the company’s e‑commerce strategy.
3. Costco Technical Outlook – Offers a detailed technical analysis with charts and indicators.
4. Costco Global Expansion Roadmap – Details the timeline and financial impact of new international stores.
5. Industry Comparison – “Warehouse Clubs vs. Big‑Box Retailers” – Contextualizes Costco’s performance relative to peers like Walmart, Target, and Sam’s Club.

These resources, combined with the article’s own synthesis, give investors a well‑rounded view of Costco’s prospects over the next 12 months.

In Summary

The Motley Fool’s December 11, 2025 article presents a cautiously optimistic picture of Costco’s near‑term future. It underscores the company’s strong membership model, steady margin profile, and growth in digital sales as core drivers. With a DCF‐derived fair value near $345, a technical rally in the $315–$335 corridor, and potential catalysts from new warehouses and international expansion, the author projects a modest upside for Costco stock in the next year. However, they also warn of the risks posed by commodity price swings, competition, and macroeconomic uncertainty—factors that could temper the anticipated gains. Whether you’re a long‑term holder or a short‑term trader, the article provides a thorough framework for assessing Costco’s trajectory through 2026.