Costco vs Target

This page offers a detailed comparison between Costco Wholesale and Target Corp., examining their distinct business models, recent financial performance, and current market context. Gain insights into how these major retailers operate and compete within the consumer market. Educational content, not financial advice.

This page offers a detailed comparison between Costco Wholesale and Target Corp., examining their distinct business models, recent financial performance, and current market context. Gain insights into...

Comparison Snapshot

Key Financial Metrics

COST

Metric

TGT

$429.83B

Market Cap

$49.60B

3.00%

Potential Profit

-12.70%

Buy

Analyst Rating

Hold

Why It's Moving

Telsey Advisory Sticks with Outperform on Costco as Earnings Momentum Fuels Analyst Confidence

Q1 EPS hit $4.34, topping estimates of $4.27, while revenue climbed to $67.31B—up 8.3% year-over-year—highlighting robust traffic and pricing power.
December comp sales surged 7% across U.S. and international warehouses, with total sales hitting $30B, reinforcing steady membership renewals near 90%.
Telsey sees 17% upside potential, aligning with Costco's disciplined margins around 4% and e-commerce gains amid broader sector strength.

Sentiment:

🐃Bullish

Target Ushers in New Era with CEO Shift, Aggressive Store Expansion, and Wellness Push

New CEO Michael Fiddelke, former COO, takes helm to tackle ongoing challenges after years of lagging performance, with revenue and net income peaking in 2022.
Announced 30 new stores and $1 billion extra investment in 2026, boosting total capex to $5 billion to fuel physical footprint growth.
Wellness category surges 30% with thousands of under-$10 items, over 1,000 new apparel pieces, plus record spring beauty assortment of nearly 3,000 products to capture everyday demand.

Sentiment:

🐃Bullish

Telsey Advisory Sticks with Outperform on Costco as Earnings Momentum Fuels Analyst Confidence

Q1 EPS hit $4.34, topping estimates of $4.27, while revenue climbed to $67.31B—up 8.3% year-over-year—highlighting robust traffic and pricing power.
December comp sales surged 7% across U.S. and international warehouses, with total sales hitting $30B, reinforcing steady membership renewals near 90%.
Telsey sees 17% upside potential, aligning with Costco's disciplined margins around 4% and e-commerce gains amid broader sector strength.

Sentiment:

🐃Bullish

Target Ushers in New Era with CEO Shift, Aggressive Store Expansion, and Wellness Push

New CEO Michael Fiddelke, former COO, takes helm to tackle ongoing challenges after years of lagging performance, with revenue and net income peaking in 2022.
Announced 30 new stores and $1 billion extra investment in 2026, boosting total capex to $5 billion to fuel physical footprint growth.
Wellness category surges 30% with thousands of under-$10 items, over 1,000 new apparel pieces, plus record spring beauty assortment of nearly 3,000 products to capture everyday demand.

Sentiment:

🐃Bullish

Investment Analysis

Costco

COST

Pros

Membership model drives high renewal rates of 93% in US and Canada, ensuring stable recurring revenue.
Strong financial health with current ratio of 1.04, low debt-to-equity of 0.27, and Altman Z-Score of 8.74.
Robust revenue growth of 8.2% in recent quarter alongside expanding margins and resilient sales amid consumer shifts.

Considerations

Elevated forward P/E ratio of 47.34 reflects premium valuation compared to market and peers.
Recent insider selling signals potential caution among executives.
Exposure to food disinflation and reduced government benefits poses sector-specific headwinds.

Target

TGT

Pros

Attractive forward P/E of 13.50 offers value relative to historical medians and broader market.
Ongoing omnichannel enhancements, AI integration, and store renovations support revenue growth prospects.
History of dividend growth paired with higher yield appeals to income-focused investors.

Considerations

Consensus estimates project 1.8% sales decline and 14.8% EPS drop for current fiscal year.
Higher stock volatility with beta of 1.24 and recent price swings exceeding Costco's.
Weakening demand and margin pressures have driven 29% share underperformance over past year.

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