Costco in 2026: A Premium Stock Worth Holding, But Is It Time to Buy?

In an investment climate marked by geopolitical tensions, shifting trade policies, and consumer spending concerns, identifying durable growth stories becomes paramount. For many, warehouse retail giant Costco Wholesale (NASDAQ: COST) has long been a cornerstone of stability. The stock's impressive 188% total return over the past five years (as of Feb. 3) underscores its historical strength. Yet, with its shares trading at a significant premium, the pressing question for 2026 isn't about its quality, but its price.

Costco's operational performance remains robust. Defying broader retail headwinds, the company reported a 3.1% increase in customer traffic for its fiscal first quarter ended Nov. 23, 2025, alongside steady same-store sales growth. This consistency is no accident; it's fueled by a powerful membership model and relentless expansion. Management has set an ambitious target of opening at least 30 net new warehouses annually, with 28 planned for fiscal 2026, supporting analyst projections for a 7.6% compound annual revenue growth rate through 2028.

However, excellence comes at a cost. Costco's shares currently command a price-to-earnings ratio of 52.9—a 106% premium to the S&P 500. It also trades at an 18% premium to Walmart and a staggering 138% premium to BJ's Wholesale Club. Even against the e-commerce behemoth Amazon, Costco is 57% more expensive by this measure. While the stock has dipped 8% from its peak, it has still rallied 15% in 2026 alone, reflecting the market's continued willingness to pay up for predictable, low-risk performance.

The analysis suggests a clear, if nuanced, stance: For existing shareholders, Costco's fundamental health and growth trajectory argue strongly for holding. For new money, however, the current valuation presents a high barrier to entry, making it difficult to justify a new "Buy" rating. The stock appears to be in a "hold and wait for a better price" zone.

Investor Perspectives:

• Michael R., Portfolio Manager: "Costco is the definition of a 'set it and forget it' holding. The expansion runway, pricing power, and member loyalty create a moat that's nearly impossible to breach. I'm not selling a single share."
• David Chen, Retail Analyst: "The metrics are undeniably strong, but the P/E is pricing in perfection. Any stumble in comp sales or margin compression could trigger a painful multiple contraction. The risk/reward isn't attractive here."
• Sarah Johnson, Long-term Investor: "I get the valuation concerns, but trying to time this stock has been a loser's game for a decade. If you're in for the long haul, you accumulate on dips and trust the business model."
• Lisa Torres, Independent Trader (Sharper Tone): "A P/E over 50 for a grocery stock? This is sheer madness. The cult-like admiration blinds people to basic math. This isn't investing; it's a faith-based initiative waiting for a reality check."

Disclosure: The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart.