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Gas prices have been front and center this year. United States retail gasoline has jumped in 2026, with the Retail Fuel Price Index showing regular gas at $3.86 per gallon in mid-July, while diesel in some states has pushed above $5 and climbed more than 2% in just a day.
That spike has fed straight into the wider economy: gas costs helped push U.S. inflation to a three-year high in May, with energy making up over 60% of that month’s price increase after Iran’s closure of the Strait of Hormuz cut off about a fifth of global oil supply.
That kind of expensive fuel backdrop is exactly why Costco Wholesale Corporation (COST) is firmly on investors’ radar. Costco has officially opened its first standalone gas station, a members-only, 40‑pump site in Mission Viejo, California, completely separate from a warehouse for the first time in the company’s history.
So does this move kick off a truly new growth engine for Costco Wholesale Corporation?
Financial Strength Behind the Fuel Push
Costco runs membership‑only warehouses that make money on both high‑volume discounted goods and the annual fees members pay, with fuel, pharmacies and other side services helping keep people coming back.
Over the last 52 weeks, the stock is down 1.94%, but it’s still up 7.76% so far this year.
That comes with a premium valuation. Costco Wholesale Corporation trades at a forward price-to-earnings ratio of 46.15 times, versus roughly 15.29 times for the wider consumer staples group.
On income, Costco Wholesale Corporation offers a $5.37 (0.57%) annual dividend yield with a forward payout ratio of 27.18%, paid quarterly and raised for 23 straight years. That sits below the sector’s average 1.89% yield, but fits the company’s habit of balancing reinvestment with steady cash returns.
The underlying numbers are strong. In fiscal 2026’s third quarter, net sales rose 11.6% year-over-year (YOY) to $69.15 billion, with year‑to‑date (YTD) sales up 9.6% to $203.37 billion. Quarterly net income hit $2.19 billion, or $4.93 per diluted share, versus $1.90 billion ($4.28 per share) a year earlier, while YTD profit climbed to $6.23 billion, or $14.01 per share, from $5.49 billion and $12.34 per share. Those profits come from 931 warehouses worldwide and a fuel business that now accounts for roughly 10% of net sales, giving Costco Wholesale Corporation the cash and scale to test standalone gas stations without putting its main business at risk.
Why Costco’s Gas Station Could Drive Growth
Costco Wholesale Corporation first standalone gas station in Mission Viejo, California opened around June 24 on a former Bed Bath & Beyond store site. And, it’s built for one purpose only: moving a lot of fuel for members. It has 40 pumps under a roughly 17,000‑square‑foot canopy, runs from 5 a.m. to 10 p.m. every day, and requires a membership card scan to buy gas, with Shop Cards likely accepted as well. There’s no store, food court, diesel, propane, or car wash. The layout is focused on speed and volume, with one‑way lanes, long hoses and underground tanks backed by simple staff facilities.
The price point is what really matters here. Regular unleaded started around $4.79 per gallon, undercutting Orange County prices that sit above $5.35, extending Costco’s long‑time use of cheap gas as a way to keep members loyal and pull in new ones. By the end of fiscal 2025, the company was already running 747 gas stations worldwide, up from 719 in fiscal 2024, and gasoline made up about 10% of total net sales. So this isn’t a small test.
The Mission Viejo site is meant to relieve crowded warehouse pumps, capture more fuel‑only trips and see if members will drive out just for gas. On top of that, planned locations in Honolulu’s Kapālama Kai around 2027 and possible sites in states like Michigan push the model beyond attached stations into true standalone spots that widen Costco’s reach and help clear up parking lot and forecourt traffic.
Wall Street’s View on COST
Costco Wholesale Corporation’s next earnings report is scheduled for Sept. 24. For the current quarter ending August 2026, analysts are looking for EPS of $6.51, up from $5.87 a year ago, which works out to 10.90% YOY growth. For the full fiscal year to August 2026, the Street sees EPS at $20.42 versus $17.99 last year, a gain of roughly 13.51%.
Bernstein’s Zhihan Ma has Costco as one of her top picks for the second half of the year, with a $1,194 target and the view that inflation actually plays to Costco’s strengths, pushing more budget‑conscious shoppers toward its low‑price, membership model. Bank of America is in the same camp with a “Buy” and a $1,200 target, Goldman Sachs Group has a “Buy” at $1,159, and JPMorgan Chase & Co. rates the stock “Overweight” with a $1,110 target.
Across the wider coverage, all 36 analysts surveyed sit at a consensus “moderate buy.” Their average target of $1,101.25 suggests a 18.5% upside, while the Street-high price target of $1,351 indicate a possible climb of 41.5%.
Conclusion
Costco’s standalone gas stations look more like a smart extension of a proven growth engine than a brand‑new pillar that will transform the story. The Mission Viejo test and planned sites in Honolulu and beyond should deepen membership value, ease congestion, and lift fuel volumes, but with gasoline already only about 10% of net sales, the real driver remains the core warehouse and fee model. In that context, shares are more likely to grind higher in line with double‑digit EPS growth and the mid‑teens upside implied by current targets, rather than suddenly rerate just because of gas‑only sites.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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