Costco Stock Dealing With Amazon Threat Ahead of Earnings – Can COST Turn Green YTD?

Costco's stock (NASDAQ: COST) is currently trading at $881.28 ahead of tonight's earnings, a 0.77% rise on a day that has seen the Nasdaq 100 move in the opposite direction, down 0.7%. The stock price reflects a market grappling with mixed signals ahead of the company's upcoming earnings report.

Analysts are projecting an EPS of $4.28 (up from $4.04 this time last year) and revenue of $67.12 billion for Costco after the closing bell.

The stock's recent performance has been influenced by a combination of factors, including legal challenges, increased competition, and varied analyst ratings. Costco's legal action against the U.S. government regarding tariffs, Amazon's expanding grocery delivery service, and analyst price target adjustments have all played a role in shaping investor sentiment.

Costco's decision to sue the U.S. government over tariffs imposed during the Trump administration underscores the company's commitment to protecting its financial interests. The lawsuit, filed in early December 2025, seeks refunds for tariffs paid under the International Emergency Economic Powers Act (IEEPA). This legal challenge mirrors similar actions taken by other major corporations and could have broader implications for trade policy.

A significant challenge to Costco's market dominance is the expansion of Amazon's same-day grocery delivery service. Amazon's foray into fresh groceries and household staples directly competes with Costco's core business. The convenience offered by Amazon could potentially draw customers away from Costco's brick-and-mortar stores, impacting sales volume.

Analyst opinions on Costco's stock are divided, reflecting the complex interplay of factors affecting the company. Wells Fargo recently raised its price target to $800, citing Costco's robust performance and growing competitive advantage. Tigress Financial Partners is even more bullish, increasing its price target to $1,065, driven by strong in-store traffic and e-commerce growth. Citi, however, maintains a neutral stance with an $800 price target, acknowledging Costco's consistent performance but highlighting the impact of discretionary sales and potential fee increases.

Looking back to last quarter for clues, Costco's third-quarter revealed revenue of $86.16 billion, an 8.1% year-over-year increase, and earnings per share of $5.87, slightly exceeding analyst expectations. Same-store sales grew by 6.4%. Despite these positive indicators, the stock experienced a 2.3% decline following the announcement, suggesting that the market had already factored in high expectations.

The company's commitment to returning value to shareholders is evident in its October 2025 announcement of a quarterly cash dividend of $1.30 per share. This dividend, payable on November 14, 2025, to shareholders of record as of October 31, 2025, reinforces Costco's financial stability and shareholder-friendly approach.

Technically, Costco's stock is currently trading below both its 50-day ($919.84) and 200-day ($961.32) Simple Moving Averages (SMAs), indicating a bearish trend. This technical signal suggests that the stock may face continued downward pressure in the short term.

The options market is pricing in a potential price swing of between $859.45 and $929.21 for Costco stock in the coming week. 

Markets will be scrutinizing several key metrics, including comparable sales growth, membership renewal rates, and e-commerce performance, to gauge the underlying health of Costco's business. With the year coming to a close, and Costco's stock price 3.2% lower YTD, a strong earnings print could well set COST bulls up to move green on the year.