Shares of Costco Wholesale Corporation (NASDAQ:COST) were trading more than 1% higher as an analyst note from Stifel noted the company’s increased market share in both the grocery and gas categories, accompanied by a 6% hike in its price target.
According to Stifel’s data, Costco (COST) and Amazon (AMZN) currently account for 12% of the U.S. grocery category dollar growth from 2019 to 2023, fueled by “strong value proposition and convenience, and aided by investments in loyalty programs and digital offerings,” Stifel analysts Michael Astrachan and Christopher Bond said in their research report.
Since 2019 “Amazon and Costco have gained the most shares of U.S. grocery sales, driving 23% of category growth despite accounting for 12% of U.S. grocery sales,” Astrachan and Bond said.
Market share gains have been sourced from traditional grocery, convenience, and drug stores, while increased market share in the gas category has been taken from convenience stores.
Stifel lifted their price target for Costco (COST) to $900 – a 6% upside to Monday’s close — based on 29x FY26 EBITDA with the premium multiple reflective of the company’s value generation and share gains attributed to key initiatives.
The firm’s Buy rating reflects its status as a “best-in-class retailer” underpinned by its strong value proposition to consumers. Expectations that the company will raise its membership fees is another bullish catalyst for Costco. (COST).