Costco Wholesale Has Fallen More Than 10% From Its Peak Before. Here's What History Says Happens Next.

Costco Wholesale (COST) stock has dropped more than 10% from its peak recently, and history suggests it typically reaches a new high within a year following such declines. The stock's all-time high was in May of this year, and a recovery is underway already, despite the relatively steep 18% drawdown. Historically, Costco has fallen 10% or more seven times in the past decade, with five instances leading to a new record within 12 months.

However, there are some recent counterexamples. In May 2022, after competitors Target and Walmart reported earnings misses due to high inflation, Costco's shares fell 31.5% from their April 2022 high but didn't fully recover until December 2023. Similarly, a decline beginning in February 2025 lasted until May 2026, despite the market achieving new all-time highs during the same period.

These declines coincided with high valuations, with a price-to-earnings ratio of 62.4 in February 2025, a 10-year high. While Costco's earnings per share (EPS) continued to grow throughout these declines, the valuation multiple shrank faster. Currently, Costco's valuation is still above its 10-year average, with a P/E ratio of 47.3 as of Oct.

15, 2026. Given these factors, a new high within the next year is less likely than the historical trend might imply, but the stock could still drift sideways while earnings catch up. For long-term investors, buying extra shares at the current lower price could be a smart move.