Is Costco's Stock Overdue for a Big Rally?

Costco's business remains strong with 11% net sales growth and 6.7% adjusted comparable growth in Q4 FY2026, outperforming market expectations. However, the stock has underperformed the S&P 500 this year (up 7% vs. 13%), trading at a steep 45x trailing earnings multiple. Despite solid fundamentals, the high valuation limits near-term upside potential, making it a safe long-term hold rather than a near-term rally candidate.