Costco Projected To Be ‘Tariff Winner’ if Inflation, Reactionary Tariffs Continue: Expert

A financial expert has declared that Costco will be the “tariff winner” if Donald Trump’s reactionary tariffs persist, further fueling inflation and shifting consumer spending.

CNBC is reporting that, according to Loop Capital, Costco could benefit from a high-tariff environment accompanied by growing inflation. The firm pointed out that bad economic times allow the wholesale club to strengthen its value proposition to its members.

With this in mind, Loop maintained a buy recommendation while lowering its price objective to $1,045 per share from $1,150. Loop’s projection suggests a 15% increase from Tuesday’s $908.75 close. Costco stock has fallen less than 1% in 2025, faring better than the wider market. For instance, the S&P 500 has fallen 15% to date this year.

Analysts frequently regard Costco as a critical company to ride out periods of market instability, and even a recession, given its large membership base and consumer loyalty. Although Trump’s tariffs and the intensifying trade war would undoubtedly harm the company, Laura Champine believes the store may gain market share in the long run.

“We’re assuming that margins are negatively impacted by tariffs. Costco is slow to pass on cost increases, so there is certainly risk to even our lowered estimates in the near-term,” the analyst said. “Over time, Costco capitulates to market pricing trends to capture its normal margin levels.”

Costco Is Best Poised To Handle the Tariffs

As RetailWire’s BrainTrust previously discussed, wholesale clubs and off-price stores are best poised to handle the economic impact of the tariffs.

Off-price stores typically acquire out-of-season products from other merchants rather than importing the majority of their merchandise, potentially reducing their tariff risk. Furthermore, with garment and footwear costs expected to rise, full-price stores will likely sell fewer clothes and shoes, creating additional opportunities for off-price buyers.

“Companies may have to either cancel orders or clear excess inventory in some other way,” UBS analyst Jay Sole wrote in a note last week recommending the purchase of TJX and Burlington stocks. “Off-price retailers like TJX and BURL typically outperform in times of dislocation.”

“Tariffs are likely to create significant disruption in the mkt, greatly increasing the availability of product available to off-pricers at attractive prices,” Citi analyst Paul Lejuez said in a note upgrading TJX and Ross Stores. “At the same time, a potentially weakening consumer environment will mean more consumers are likely to trade down to the off-price channel in search of value and the treasure hunt shopping experience.”