COST
Costco Wholesale Corporation
$945.47
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 35.5% above fair value
You pay
$945.47
Bear
$574.65
Fair
$697.79
Bull
$820.93
Bear
$574.65
-39.2%
$18.21 × 32x P/E
Fair
$697.79
-26.2%
$18.21 × 38x P/E
Bull
$820.93
-13.2%
$18.21 × 45x P/E
Adjust Assumptions
38.3x
18.21$
Key Value Driver
Normalized P/E multiple (38x base case)
Implied Market Multiple
51.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (58 analysts)
$1103.58
Divergence from AlphaVal
37%
Summary
Applying a 38x P/E to adjusted EPS of $18.21, the base-case value is $697.79 per share.
Warnings
Wall Street's average price target is $1103.58 (from 58 analysts). Our estimate is 37% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples