COST vs TGT Stock Comparison: AI Score, Valuation, Performance and Upside
Costco and Target are both US large-format retailers but with very different business models and risk profiles. Costco's membership fee model creates a unique profit structure that makes it one of the best retail businesses ever created. Target is a conventional mass retailer with discretionary merchandise exposure creating more economic sensitivity. Costco is consistently one of the highest-quality retail compounders; Target is a quality retailer with more cyclical exposure.
COST vs TGT is the warehouse membership compounder whose $5B+ membership fee revenue lets it sell merchandise at near-cost creating irreplaceable member loyalty and near-perfect renewal rates (Costco) versus the 'cheap chic' discretionary mass retailer with design-forward private labels and omnichannel convenience facing discretionary demand sensitivity (Target) — membership fee model monopoly vs discretionary style-value retail.
TGT holds the edge across 3 of 5 key metrics in this comparison. TGT leads on both 1-year return (+76.91%) and forward P/E quality (17.17x vs 41.72x for COST), a relatively favorable combination of momentum and valuation. On fundamentals, COST is growing revenue faster (21.50%), while TGT maintains the higher operating margin (5.90%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for COST (+13.94%) than for TGT (-0.96%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- prefer the most loyal membership-driven retail business model where 93%+ renewal rates and Kirkland Signature brand trust create one of retail's most durable competitive positions
- value Costco's profit structure where membership fees generate operating profit allowing merchandise sales near-cost — competitors literally cannot match Costco pricing without losing money
- want consistent quality retail compounding at a premium valuation from one of the most respected management teams in retail history
- are comfortable with 45–55x P/E premium leaving no margin for error, modest e-commerce presence vs pure digital retailers, and membership fee growth dependence on new warehouse openings
- prefer the 'cheap chic' mass retailer with design-differentiated private labels (Cat & Jack, A New Day, Threshold) attracting higher-income discretionary shoppers seeking style at value prices
- value Target's recovery thesis if discretionary demand normalizes after inventory and margin compression, restoring historical operating margins
- want mass retail exposure with omnichannel convenience (same-day Drive Up, Shipt) and Circle loyalty program competing directly with Amazon and Walmart delivery
- are comfortable with discretionary category sensitivity in recessions, shrink/organized retail crime operating cost headwinds, and brand positioning risks from merchandise controversy
| Metric | COST | TGT |
|---|---|---|
| AI scorei | 61.5 | 52.1 |
| AI ranki | #156 | #412 |
| Latest closei | $895.31 | $158.19 |
| 1M returni | -6.45% | -0.51% |
| 6M returni | -8.15% | +38.19% |
| 1Y returni | -5.99% | +76.91% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | COST | TGT |
|---|---|---|
| 1Y ago | $9.4K (-6.0%) started 2025-09-18 | $17.69K (+76.9%) started 2025-09-18 |
| 5Y ago | $21.79K (+117.9%) started 2021-09-20 | $8.12K (-18.8%) started 2021-09-20 |
| 10Y ago | $82.39K (+723.9%) started 2016-09-19 | $39.17K (+291.7%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | COST | TGT |
|---|---|---|
| Market capi | $419.3B | $74.13B |
| Trailing P/Ei | 47.63 | 17.21 |
| Forward P/Ei | 41.72 | 17.17 |
| Price/Salesi | 1.67 | 0.42 |
| EV/Revenuei | 1.42 | 0.81 |
| Analyst targeti | $1,077.31 | $161.62 |
| Target upsidei | +13.94% | -0.96% |
| Metric | COST | TGT |
|---|---|---|
| Revenue growthi | 21.50% | 5.30% |
| Earnings growthi | 45.50% | 100.50% |
| EPS growthi | +45.50% | +100.50% |
| FCF margini | +2.37% | +3.20% |
| Operating margini | 3.67% | 5.90% |
| Profit margini | 3.01% | 4.08% |
| ROIC proxyi | 29.15% | 26.41% |
| Return on equityi | 29.15% | 26.41% |
| Dividend yieldi | 0.62% | 2.84% |
| Payout ratioi | 27.01% | 47.30% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 0.86 | 0.97 |
| Debt/equityi | 60.26 | 106.99 |
| Current ratioi | 1.07 | 0.99 |
| Quick ratioi | 0.56 | 0.26 |
Over the past year, COST and TGT have moved weakly in the same direction (correlation of 0.32), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | COST | TGT |
|---|---|---|---|
| 1Y | Growthi | -5.99% | +76.91% |
| CAGRi | -5.99% | +76.98% | |
| Volatilityi | 19.84% | 30.67% | |
| Sharpe ratioi | -0.44 | 1.88 | |
| Sortino ratioi | -0.60 | 2.92 | |
| Max drawdowni | 18.33% | 14.41% | |
| Current drawdowni | 18.19% | 6.89% | |
| Avg drawdowni | 6.59% | 3.17% | |
| Ulcer Indexi | 8.53% | 4.41% | |
| Max daily dropi | 4.21% | 5.44% | |
| Max wkly dropi | 8.96% | 10.18% | |
| 5Y | Growthi | +107.91% | -27.42% |
| CAGRi | +15.78% | -6.21% | |
| Volatilityi | 22.99% | 36.12% | |
| Sharpe ratioi | 0.56 | -0.12 | |
| Sortino ratioi | 0.78 | -0.16 | |
| Max drawdowni | 31.40% | 65.22% | |
| Current drawdowni | 18.19% | 34.25% | |
| Avg drawdowni | 9.41% | 41.73% | |
| Ulcer Indexi | 11.62% | 44.19% | |
| Max daily dropi | 12.45% | 24.93% | |
| Max wkly dropi | 16.26% | 30.35% | |
| 10Y | Growthi | +593.21% | +194.76% |
| CAGRi | +21.37% | +11.42% | |
| Volatilityi | 22.04% | 33.55% | |
| Sharpe ratioi | 0.79 | 0.36 | |
| Sortino ratioi | 1.12 | 0.51 | |
| Max drawdowni | 31.40% | 65.22% | |
| Current drawdowni | 18.19% | 34.25% | |
| Avg drawdowni | 6.86% | 25.74% | |
| Ulcer Indexi | 9.34% | 32.72% | |
| Max daily dropi | 12.45% | 24.93% | |
| Max wkly dropi | 16.26% | 30.35% |
| Category | COST | TGT |
|---|---|---|
| Company | Costco Wholesale Corporation | Target Corporation |
| Sector | Consumer Defensive | Consumer Defensive |
| Industry | Discount Stores | Discount Stores |
| Core business | Costco operates warehouse membership retail — customers pay annual membership fees ($65–$130) for access to Costco's warehouse stores selling bulk merchandise at thin margins over cost. Costco's business model is unique: the majority of its operating profit comes from membership fee revenue (~$5B annually), not merchandise margins. This allows Costco to sell products near cost, creating extraordinary value for members and driving the highest membership renewal rates (93%+) in retail. Costco's Kirkland Signature private label creates additional margin and member loyalty. | Target is a mass retail chain with 1,900+ US stores known for affordable style (apparel, home décor, beauty) alongside everyday essentials (grocery, household, pets). Target differentiates from Walmart through its 'cheap chic' merchandise — owning designer brand collaborations and exclusive product lines that attract higher-income shoppers seeking value with style. Target's Circle loyalty program provides personalized offers. Target's discretionary revenue concentration (~50% apparel, home, hardlines) makes it more economically sensitive than pure-grocery retailers. |
| Investor focus | Investors track membership fee revenue and renewal rates, same-store sales, and Costco's ability to grow membership penetration globally. | Investors track comparable sales and traffic, discretionary category performance, inventory management, operating margin recovery, and grocery/consumables share. |
- Membership fee revenue model is uniquely durable — Costco earns profit from subscriptions regardless of merchandise margins, creating a profit structure that makes Costco immune to price competition
- 93%+ membership renewal rate is one of the highest consumer loyalty metrics in retail — Costco members renew because the value proposition ($1 hot dog + soda still $1.50 since 1985) is undeniable
- Kirkland Signature private label exceeds $60B in annual sales — a brand more trusted by consumers than most CPG companies' own products
- 'Cheap chic' brand positioning attracts higher-income discretionary shoppers who value design aesthetics — a differentiated market position vs Walmart's value-only positioning
- Target Circle loyalty and same-day fulfillment (Order Pickup, Drive Up, Shipt) create omnichannel convenience matching Amazon and Walmart delivery
- Private label brand portfolio across home, apparel, and food provides margin expansion vs national brand product mix
- Costco's valuation is permanently premium — trading at 45–55x P/E, Costco's perfect business commands a multiple that leaves little room for execution misses
- E-commerce integration is Costco's relative weakness — the warehouse format is inherently physical and building online without cannibalizing membership value is an ongoing challenge
- Grocery and gasoline inflation sensitivity: when food prices normalize, Costco's perceived value proposition changes — members may perceive less savings vs regular retail
- Discretionary category concentration creates significant recession sensitivity — Target underperforms Walmart and Costco during economic contractions as consumers defer apparel and home purchases
- Target's DEI and product controversy backlash (2023 Pride merchandise) caused Target to strategically reduce certain product categories — the brand positioning consequences are ongoing
- Shrink and organized retail crime have elevated Target's inventory losses — store security investments add operating costs while theft remains structurally elevated vs pre-pandemic
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