Investors should aim to regularly view their portfolios with a fresh perspective. It's always a good idea to think about what moves to make, deciding whether certain companies remain solid long-term opportunities. Looking at which businesses deserve to be let go is also critical.
Even Costco Wholesale (COST +1.10%), a blue chip stock whose shares have produced a total return of 188% in five years (as of Feb. 3), isn't immune from a reassessment. Should you buy, sell, or hold the retailer in 2026?
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No complaints with the fundamentals
These days, investors have a lot to think about. The impact artificial intelligence will have on industries and the economy is a top focus. Trade policies, ongoing geopolitical tensions between the U.S. and other countries, rising federal debt, and weak consumer confidence also add uncertainty to the mix.
But Costco continues to shine. It seems that this company can handle whatever happens in the macro environment. Costco keeps posting solid same-store-sales growth like clockwork. Last fiscal quarter (the first quarter of fiscal 2026, ended Nov. 23, 2025), traffic was up 3.1%, clearly an encouraging trend when it seems that consumers are pulling back on their spending.
Add same-store sales growth to a constantly expanding physical footprint, and it supports Costco's durable revenue gains. Analysts expect the top line to increase at a compound annual rate of 7.6% between fiscal 2025 and fiscal 2028. The growth should still be happening far into the future. That's because management explicitly stated its goal of eventually getting to at least 30 net new warehouse openings per year. The business is expected to open 28 net new stores in fiscal 2026.
NASDAQ: COST
Key Data Points
The market always places a premium on this business
Right now, Costco shares are trading 8% below their peak. But the investment community has bid up the stock 15% just in 2026. This points to an obvious truth, which is that the market always seems to place a premium on this business. That's understandable, given that Costco isn't a high-risk holding and that it has predictable financial performance and staying power.
Costco shares currently trade at a price-to-earnings ratio of 52.9. This is 106% more expensive than the S&P 500 index. And it represents 18% and 138% premiums, respectively, to competitors Walmart and BJ's Wholesale. Based on this popular valuation metric, Costco is also 57% more expensive than e-commerce company Amazon.
I don't think Costco stock is a buy right now. Furthermore, if you're an existing shareholder, I don't think it's time to be a seller, either. The company is performing well from a fundamental perspective, so it makes sense to hold.
