Wells Fargo Trims Costco (COST) Target Amid Mixed Retail Backdrop

Group 1: Price Target Adjustment - Wells Fargo analyst Edward Kelly lowered the price target on Costco Wholesale Corporation (COST) to $900 from $1,000 while maintaining an Equal Weight rating, indicating a mixed retail backdrop for 2026 but recognizing ongoing opportunities [1] Group 2: Membership Model and Renewal Rates - Costco's membership model remains strong, with renewal rates in the US and Canada consistently above 90%, providing visibility into future earnings due to a large and stable member base [2] - The company offers two membership tiers: Gold Star at $65 and Executive at $130, with a notable increase of over 9% in executive memberships from the prior year, supporting higher fee income and customer engagement [3] Group 3: Sales and Growth Strategy - Costco operates 923 warehouses globally, with approximately two-thirds located in the US, and reported net sales of $66 billion for fiscal Q1 2026, ending November 23 [4] - The company plans to open 28 net new warehouses in fiscal 2026, indicating a commitment to long-term growth [4] - There is potential for domestic growth and international expansion, particularly in China, which supports revenue growth in 2026 and beyond [5]