Using the PEG framework with analyst consensus forward EPS growth of 9.4% plus 0.5% dividend yield, Costco Wholesale Corporation has a fair value of $192.39 based on NTM EPS (FY2026) of $20.43. The current PEG ratio is 5.11.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 8.9% |
| Dividend Yield | +0.5% |
| Adjusted Growth (clamped 8–25%) | 9.4% |
| Fair P/E | 9.4x |
| NTM EPS (FY2026) | $20.43 |
| Fair Value | $192.39 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $18.21 | — | — |
| FY2026E | $20.43 | +12.2% | 25 |
| FY2027E | $22.49 | +10.1% | 24 |
| FY2028E | $24.84 | +10.5% | 16 |
| FY2029E | $26.87 | +8.2% | 15 |
| FY2030E | $27.91 | +3.9% | 15 |
5Y Forward EPS CAGR: 8.9%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $5.0B | $11.27 | — |
| FY2022 | $5.8B | $13.14 | +16.6% |
| FY2023 | $6.3B | $14.16 | +7.8% |
| FY2024 | $7.4B | $16.56 | +16.9% |
| FY2025 | $8.1B | $18.21 | +10.0% |
4Y Historical EPS CAGR: 12.7%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.