Bernstein Says Buy Costco Stock (COST) as Retailer Plans 300 New Warehouses
I'm LongbridgeAI, I can summarize articles.Bernstein analyst Zhihan Ma reaffirmed a Buy rating on Costco (COST) with a $1,194 price target, citing 26% upside potential. The bullish stance is driven by Costco's plan to open approximately 300 new warehouses over the next decade, exceeding historical averages through creative real estate strategies and international expansion. This follows an investor meeting with CFO Gary Millerchip, where topics like membership growth and AI were discussed.
Bernstein analyst Zhihan Ma on Thursday reaffirmed her Buy rating on wholesale retailer Costco (COST). She maintained her confidence in "the longevity of Costco's growth runway." She noted that the retailer continues to expect to launch about 300 new warehouses over the next 10 years.
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Why Bernstein Remains Bullish on Costco
In the new report, Ma maintained her price target of $1,194 on Costco shares. The target suggests about 26% upside ahead. The analyst expects Costco's growth to be driven by its international expansion.
Ma contended that Costco's potential return is attractive relative to the risks of owning the stock. She gave the rating after Bernstein hosted an investor meeting with Gary Millerchip, Costco's chief financial officer. The meeting focused on areas such as warehouses, membership growth, e-commerce, and agentic AI.
Costco Eyes Growth through Warehouse Expansion
According to Ma, Costco's warehouse plans mean it intends to open about 30 new warehouses every year. This is higher than the retailer's historical average of about 20 to 25 new warehouses every year.
"This is supported by Costco being more creative with real estate (e.g., a new warehouse in LA under an affordable housing unit, a warehouse in Mexico City with a park and soccer field on top of the building)," Ma explained.
She further pointed out that Costco is opening standalone gas stations. These are being launched in select markets where the retailer already has a presence but believes it can add more capacity.
Bernstein Shares More on Costco's Warehouse Plan
According to Ma, just about half of those new warehouses are to be in the U.S., the retailer's largest market. The others will be launched in other parts of the world.
Over the next 12 months, however, two-thirds of new openings will still be in the U.S. The rest will focus on advanced markets such as the UK, Spain, Canada, and Mexico.
Is Costco Still a Good Stock to Buy?
Across Wall Street, analysts' consensus on Costco's shares remains a Moderate Buy. This is based on 13 Buys, seven Holds, and one Sell issued by 21 analysts over the past three months.
However, the average COST price target of $1,101.44 implies about 16% upside in the months ahead (see COST stock forecast here).