Mizuho Securities raised its price target for Costco from $1,065 to $1,100 while maintaining a Buy rating. The firm noted that fuel sales at Costco locations accelerated significantly in March. Combined with an average price increase of nearly 20%, gasoline sales contributed an additional 250 basis points to U.S. comparable sales growth. If fuel prices remain at current levels, with potential year-over-year increases of 30% or more, sales could see further upside in the coming months and quarters.

Costco’s approximately $30 billion fuel business operates with a relatively low gross margin of about 1% to 2%. Including this lower-margin segment could reduce overall merchandise margins (excluding membership fees) by around 20 basis points, which aligns with historical trends. Costco’s overall gross margin is approximately 13%, reflecting its high-volume, low-markup business model. Mizuho emphasized that fuel-related dynamics do not undermine its bullish outlook and continues to recommend buying the stock.

Costco also announced a 13% increase in its quarterly dividend, raising it to $1.47 per share, or $5.88 annually. The dividend will be paid on May 15, 2026, to shareholders of record as of May 1, 2026. This increase highlights Costco’s consistent commitment to returning value to shareholders, with 23 consecutive years of dividend payments and approximately 12% dividend growth over the past 12 months.

The retailer currently operates 928 warehouse locations worldwide, including 637 in the United States and Puerto Rico. Its international operations include Canada (115 locations), Mexico (42), Japan (37), the United Kingdom (29), South Korea (20), Australia (15), Taiwan (14), China (7), Spain (5), France (3), Sweden (2), and one location each in Iceland and New Zealand.

Costco also operates e-commerce platforms in multiple regions, including the U.S., Canada, the U.K., Mexico, South Korea, Taiwan, Japan, and Australia. The company currently trades at a price-to-earnings ratio of 51.17, with a market capitalization of approximately $436.8 billion.

Market Interpretation

Wells Fargo also raised its price target for Costco to $1,000 while maintaining a Hold rating, noting that core comparable sales rose 6.2% in March.

Overall, Costco’s strong sales performance continues to reflect resilient consumer demand and reinforces investor confidence in the company, even amid broader macroeconomic uncertainties.