Costco (COST) is expected to beat earnings estimates in its next quarterly report on September 24, 2026. The company has a strong track record of surpassing consensus estimates, with an average beat of 0.53% over the last two quarters. With a positive Earnings ESP of +1.45% combined with a Zacks Rank #3 (Hold), the stock shows potential for another earnings surprise.

The article applies Peter Lynch's investment philosophy of buying familiar brands to two consumer stocks: Costco Wholesale and TJX Companies. Both companies demonstrate strong fundamentals with solid membership retention and sales growth, continued expansion plans, and impressive earnings growth, making them potential long-term investments aligned with Lynch's approach.

Costco's business fundamentals remain strong with 11.6% sales growth and 6.6% comparable-store sales increases, plus robust e-commerce growth of 21%. However, the stock is not recommended as an obvious buy due to elevated valuation at 47x trailing earnings, above its 10-year average of 40x. Investors may be better served waiting for the stock to compress to historical valuation levels.

Target has delivered strong Q2 results with 3.8% comparable sales growth, 3.6% increase in foot traffic, and 8.7% digital sales growth. Despite a 67% year-to-date rally, the stock remains undervalued at a 17 P/E ratio compared to Walmart's 37 P/E, offering a 2.81% dividend yield and potential upside for value investors.

The article highlights three consumer stocks expanding from regional to national operations: Dutch Bros (coffee chain growing from 470 to 1,225 locations with 32% revenue growth), BJ's Wholesale (warehouse retailer expanding westward with 13% revenue growth and attractive 20 P/E ratio), and Cava Group (Mediterranean fast-casual restaurant chain with 32% revenue growth and 450 locations). All three companies are positioned for significant long-term growth similar to historical successes like Walmart and Starbucks.

Walmart and Costco are both reliable dividend stocks, but they take different approaches. Walmart offers a higher yield (0.95% vs 0.6%) and has increased its dividend for 53 consecutive years, making it better for income investors. Costco has a history of large special dividends and faster dividend growth (10% annually vs 4%), making it more attractive for dividend growth investors. However, both stocks are currently overvalued relative to their five-year averages.

Target Corporation reported an 8.7% increase in comparable digital sales in Q2 fiscal 2026, with same-day delivery growing over 25%. The retailer leverages its store network as fulfillment hubs for over 95% of sales, enabling faster delivery and fulfilling nearly 30% more same-day and next-day units year-over-year. Target's shares have rallied 30.6% over the past three months, outperforming its industry peers, and currently carries a Zacks Rank #2 (Buy) rating with increased earnings estimates.

Costco stock declined 2.24% to $934.66, underperforming the broader market which gained 0.72%. The stock has dropped 1.84% over the past month, lagging behind the Retail-Wholesale sector's 4.88% gain. However, analysts expect strong earnings growth of 10.9% YoY when the company reports on September 24, 2026, with full-year earnings projected at $20.42 per share (+13.51% YoY). Costco currently holds a Zacks Rank of #3 (Hold) but trades at a premium valuation with a Forward P/E of 46.82 versus the industry average of 25.72.

Higher oil prices are driving value-conscious customers to Costco, leveraging the company's decades-long track record of delivering excellent value. The article highlights Costco's strong customer retention due to its competitive pricing advantage during inflationary periods.

Costco's stock hasn't split since January 2000, when a 2-for-1 split cut the share price from $98.12 to $49.06. A $1,000 investment made before that split would be worth just over $19,700 today. With shares now trading near $1,000, investors are speculating about a potential future split, though the company hasn't indicated one is imminent. Stock splits themselves don't create value but often generate market bullishness.

The Motley Fool compares Walmart and Costco as investment options, analyzing two of the world's best retailers that compete on low prices. The article examines which stock may be the better buy for investors, though specific recommendations are not detailed in the provided excerpt.

Costco has underperformed the S&P 500 in 2026 with an 11.5% gain versus the index's 13.7%, but the article argues it remains a solid long-term investment due to its recession-resistant business model, strong 92.2% membership renewal rate, and history of outperforming the S&P 500 over 5 and 10-year periods. The stock pays a quarterly dividend (0.6% yield) plus occasional special dividends, with an upcoming earnings report on September 26 that could influence near-term price movement.