Costco (COST) Added to Mizuho Top Picks After Pullback

Core Viewpoint - Costco Wholesale Corporation (NASDAQ:COST) is recognized as a strong investment opportunity, particularly after a recent stock pullback, which Mizuho believes is overdone [2]. Group 1: Stock Performance and Analyst Insights - Costco shares experienced a decline of approximately 6% in 2025, while the S&P 500 index increased by over 16% [3]. - Mizuho upgraded Costco's stock rating from Neutral to Outperform and raised the price target from $950 to $1,000 [2]. - Analyst David Bellinger noted that the recent stock correction of about 20% is linked to concerns over slowing membership and comparable sales growth, which he argues are temporary issues [3]. Group 2: Membership and Growth Analysis - Bellinger provided a proprietary store-level analysis indicating that around half of recent U.S. warehouse openings are 'fill-ins,' which are affecting membership growth by drawing demand from high-volume locations [3]. - The rate of premium member additions in Q1 is 2-3 times higher than total membership growth, indicating a positive trend in trade-up activity [3]. - Domestic renewal rates for memberships remain exceptionally high, exceeding 90% and above the 10-year running average [3]. Group 3: Future Catalysts - Current investor concerns are attributed to an excess of consumer demand, which may stabilize as Costco normalizes wage growth after a period of strong increases [3]. - There is potential for a special dividend, which could serve as a catalyst for future stock performance [3].