Costco faces margin pressure as BofA cuts price target

What Brokers Say Retail & Consumer Edited by: Angela Harmantas 13:26 Wed 16 Sep 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Costco Wholesale Corporation ( NASDAQ:COST XETRA:CTO ) View Price & Profile Costco faces margin pressure as BofA cuts price target Published: 13:26 16 Sep 2026 EDT Costco Wholesale Corporation (NASDAQ:COST, XETRA:CTO) retained Bank of America Corp (NYSE:BAC) 's Buy rating despite a price target cut, as rising supply chain costs prompted a more cautious margin outlook. In September 16 trading, shares fell to $900.49, while the broker maintained its "buy" rating and cut its price target to $1,095 from $1,200. The bank forecasts fourth-quarter adjusted earnings of $6.52 per share versus $6.55 consensus, incorporating 11.3% sales growth, a 10-basis-point gross margin decline and 20-basis-point operating expense leverage. Its revised target applies a multiple of 48 times estimated financial year 2027 earnings, down from 53 times, reflecting greater caution about margins amid rising supply chain costs. Still, US comparable sales excluding gasoline grew 7.2% in the fourth quarter versus 6.8% in the third, supporting the bank's confidence in continued market share gains. The broker expects membership growth to normalize at 4% to 5% over the medium term after fewer Asian warehouse openings and moderating digital signups slowed growth. Costco's value strategy and higher-income customer base underpin the bank's "buy" stance, while new membership perks and the Kirkland brand could help attract additional members. Any fourth-quarter tariff refunds could provide extra funding to keep prices competitive, the broker said, after Costco largely mitigated tariff exposure across its general merchandise business last year. Bank of America sees scope for a special dividend announcement over the next few quarters, supported by its projected fourth-quarter cash balance of $20.4 billion. Continue reading