Costco Wholesale Corp shares fell on Friday, underperforming a mixed broader market, as JPMorgan analyst Christopher Horvers lowered the firm's price target to $1,100 from $1,110 while maintaining an Overweight rating. The stock declined 0.5% to $908.42, trading below key moving averages and signaling a bearish trend in the near term despite strong sales performance. The Nasdaq Composite slipped 0.11%, while the S&P 500 rose 0.14%.

Analyst Target Cut Weighs on Sentiment

The reduction in the price target suggests JPMorgan remains positive on the retailer's long-term outlook but sees slightly less near-term upside following the stock's recent run. The firm reiterated its Overweight rating, indicating confidence in the company's fundamental strength.

June Sales Show Continued Strength

Costco reported net sales of $29.24 billion for the five weeks ended July 5, 2026, a 10.6% increase from the prior year, reflecting resilient consumer demand and steady traffic growth. For the first 44 weeks of the fiscal year, net sales totaled $250.43 billion, up 10.1%. Management noted that gasoline price deflation and foreign exchange acted as headwinds during the period, although underlying demand remained strong.

Regional Comparable Sales

Comparable sales data highlights divergent performance across primary markets. U.S. comparable sales rose 10.6%, highlighting continued strength across both discretionary and essential merchandise. Canadian comparable sales increased 3.7%, pointing to more modest growth amid regional spending and currency differences.

Technical Setup Remains Weak

Costco remains below several key moving averages, signaling that the stock is still attempting to recover from recent weakness. Shares are trading 4.1% below the 20-day Simple Moving Average (SMA), 7.3% below the 50-day SMA, 7.9% below the 100-day SMA, and 4.6% below the 200-day SMA. The 20-day SMA sitting below the 50-day SMA suggests near-term momentum remains negative.

The Moving Average Convergence Divergence (MACD) is below its signal line, indicating fading upside pressure unless buyers push the stock higher. The longer-term trend remains constructive because the 50-day SMA is still above the 200-day SMA, preserving the "golden cross" formed in March. Key resistance is identified at $970, near the 50-day Exponential Moving Average (EMA), while support sits at $908.50. Over the past 12 months, Costco shares have declined about 5.9% after reaching a peak in May.

Consumers filed a class-action lawsuit against Costco Wholesale Corporation accusing the retailer of selling Orgain Organic Plant-Based Protein Powder products contaminated with toxic heavy metals without disclosing the risk to buyers. The lawsuit, filed in the U.S. District Court for the Western District of Washington on July 7, 2026, alleges that despite marketing the protein powder as "high quality, clean, and nutritious," the products contained unsafe levels of lead, cadmium, and arsenic.

Independent laboratory testing by The Clean Label Project and Consumer Reports found detectable levels of heavy metals in the affected products. The results indicate that Costco sold Orgain products with undisclosed lead levels reaching 67 ppb, which exceeds recognized safety thresholds by more than 600%. Cadmium levels tested as high as 70.3 ppb, and arsenic levels reached 19.8 ppb.

Contamination Levels and Health Risks

The World Health Organization states there are no known safe levels of exposure to heavy metals, which accumulate in the body over time. Health effects linked to heavy metal exposure include various cancers, reproductive problems, nervous system disorders, gastrointestinal issues, and immune system dysfunction.

Allegations Against Costco

Attorneys allege that Costco, as a major national retailer with sophisticated supply-chain management and quality control processes, knew or should have known about the contamination. The lawsuit claims the retailer continued to sell the products without warning consumers, using marketing language such as "quality ingredients, higher standards" and "delivering clean nutrition" to capitalize on health-conscious buyers.

The complaint notes that Orgain products are sold for $0.79 to $0.80 per oz., while comparable protein powder products with non-detectable levels of heavy metals are available at prices as low as $0.42 per oz. The lawsuit brings claims of fraudulent concealment, unfair trade practices, and violations of state consumer protection laws. Plaintiffs seek punitive damages and injunctive relief requiring Costco to stop selling the affected protein powder without adequate disclosure.