Issaquah, Washington-based Costco Wholesale Corporation (COST) operates a chain of membership-only big-box warehouse club retail stores. With a market cap of $438.5 billion, Costco operates through its outlets spread across North America, Asia, and Europe, and an e-commerce website.

The discount retailer has lagged behind the broader market over the past year. COST stock has gained 14.8% over the past 52 weeks and 8.2% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 20.6% surge over the past year and 9.6% returns in 2025.

However, narrowing the focus, Costco has outpaced the sector-focused Consumer Staples Select Sector SPDR Fund’s (XLP) 4.9% uptick over the past 52 weeks and 5.1% gains on a YTD basis.

Costco Wholesale’s stock prices gained 3.1% in the trading session following the release of its better-than-expected Q3 results on May 29. The company observed high single-digit growth in store sales across regions and a 14.8% growth in e-commerce revenues. Overall, its revenues for the quarter came in at $63.2 billion, up 8% year-over-year and surpassing the Street estimates by a thin margin. Further, its EPS for the quarter surged 13.2% year-over-year to $4.28, exceeding the consensus estimates by 71 bps.

While Costco’s financials have remained impressive in recent quarters, the company faces a serious threat of macro slowdown. The consumer spending in the US has substantially slowed down in recent months, and the job market has also remained weak, alongside the new tariffs can further dampen prospects for the discount retail industry.

For the full fiscal 2025, ending in August, analysts expect Costco to deliver an EPS of $17.97, up 11.6% year-over-year. The company has a mixed earnings surprise history. While it surpassed the Street’s bottom-line estimates thrice over the past four quarters, it missed the estimates on one other occasion.

Costco has a consensus “Moderate Buy” rating overall. Of the 32 analysts covering the stock, opinions include 14 “Strong Buys,” four “Moderate Buys,” and 14 “Holds.”

This configuration is notably less optimistic than three months ago, when 16 analysts gave “Strong Buy” recommendations and five analysts suggested “Moderate Buy” ratings.

On Aug. 5, Erste Group’s analyst downgraded COST stock from “Buy” to “Hold” due to concerns over the expected slowdown in sales growth in the upcoming fiscal year.

As of writing, Costco’s mean price target of $1,092.44 represents a 10.2% upside potential. Meanwhile, the street-high target of $1,225 suggests a notable 23.6% premium to current price levels.