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

$433.96B

Market Cap

$47.07B

4.30%

Potential Profit

-6.79%

Buy

Analyst Rating

Hold

Why It's Moving

Costco Shares Surge to 19-Week High on Robust Q1 Earnings and Analyst Upgrades

Q1 comparable sales hit 6.4% (7.1% excluding gas), driven by broad-based strength in non-foods, foods, and fresh categories, plus 20.5% digitally enabled growth.
Mizuho upgraded to Outperform with $1,000 target, spotlighting accelerating trade-up to premium memberships at 2-3x total adds and adding COST to Top Picks.
Deutsche Bank initiated Buy at $1,044, citing tailwinds like 2026 stimulus despite food disinflation and value-focused spending.

Sentiment:

🐃Bullish

Target Stock Gains Momentum Ahead of Leadership Shakeup with Fiddelke Set to Take CEO Helm.

Upcoming 'Fiddelke Transition' sparks optimism, with focus on the 'Enterprise Acceleration' plan to boost margins from current 4.4%-5.3% levels toward the 6% long-term goal.
Recent institutional buying, like LJI Wealth Management increasing its position, signals growing confidence despite unchanged earnings estimates showing Q1 EPS at $2.16.
Stock attracts attention with stable FY2026 EPS outlook around $7.73, up 6% year-over-year, highlighting resilience in private brands and innovation amid discretionary spending battles.

Sentiment:

🐃Bullish

Costco Shares Surge to 19-Week High on Robust Q1 Earnings and Analyst Upgrades

Q1 comparable sales hit 6.4% (7.1% excluding gas), driven by broad-based strength in non-foods, foods, and fresh categories, plus 20.5% digitally enabled growth.
Mizuho upgraded to Outperform with $1,000 target, spotlighting accelerating trade-up to premium memberships at 2-3x total adds and adding COST to Top Picks.
Deutsche Bank initiated Buy at $1,044, citing tailwinds like 2026 stimulus despite food disinflation and value-focused spending.

Sentiment:

🐃Bullish

Target Stock Gains Momentum Ahead of Leadership Shakeup with Fiddelke Set to Take CEO Helm.

Upcoming 'Fiddelke Transition' sparks optimism, with focus on the 'Enterprise Acceleration' plan to boost margins from current 4.4%-5.3% levels toward the 6% long-term goal.
Recent institutional buying, like LJI Wealth Management increasing its position, signals growing confidence despite unchanged earnings estimates showing Q1 EPS at $2.16.
Stock attracts attention with stable FY2026 EPS outlook around $7.73, up 6% year-over-year, highlighting resilience in private brands and innovation amid discretionary spending battles.

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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