Prediction: $5,000 in Costco Stock Will Trail the Market Through 2030

Costco Wholesale Corporation's (COST) shares are currently trading at around $1,010, nearly 8% below their record high of $1,094.32 set on May 19. The company's fiscal 2026 earnings per share grew by 14%, outpacing the 10% increase from the previous year. Net sales also increased by 10% to approximately $297 billion. Based on earnings growth, a lower valuation multiple, and the dividend, $5,000 invested in Costco now could be worth around $6,350 by the end of 2030.

However, the same amount invested in an index fund matching the S&P 500 (^GSPC) might reach $7,450. Costco's earnings per share in fiscal 2026 included a one-time boost of $0.15 per share due to tariff refunds, but without that, the company earned around $20.61 per share, still about 13% above fiscal 2025's $18.21. Costco's membership fees, which make up around half of its operating income, grew by only about 7% year over year by the fiscal fourth quarter of 2026.

The company plans to open up to 33 new warehouses in fiscal 2027, which could further boost its earnings. Assuming a price-to-earnings ratio of 40 times by the end of 2030, Costco's stock could trade near $1,250, making $5,000 worth about $6,190. Adding the company's dividend, which has been growing at around 11% per year, could result in a total of about $6,350, a 6% annual gain.

In comparison, the S&P 500 has returned about 10% per year since 1928, so $5,000 invested in an index fund could grow to $7,450 by the end of 2030. However, it's possible that Costco's price-to-earnings ratio may not decrease or even stay the same, and the stock could trail the index fund if investors pay a lower price for Costco's earnings.

Despite this, the analyst believes Costco remains a strong long-term retailer to own, but does not expect the stock to outperform an index fund.