Costco Builds First Standalone Members-Only Gas Station
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy COST?
Source: CNBC
- New Business Expansion: Costco is constructing its first standalone members-only gas station in Mission Viejo, California, covering approximately 17,000 square feet with 40 pumps, aimed at attracting more customers and enhancing membership loyalty.
- Market Response Expectations: Analysts believe the new gas stations could stimulate membership growth, particularly against the backdrop of soaring oil prices, highlighting significant potential to attract new members.
- Sales Data Analysis: Currently, Costco operates around 750 gas stations, selling over 8 billion gallons annually, with projections indicating that gas sales could account for 10% of net sales by 2025, showcasing its strong appeal during high gas price periods.
- Strategic Significance: Although gas operations yield low margins, Costco reinforces its value proposition by offering lower prices (20 to 30 cents cheaper per gallon), which could enhance long-term member loyalty.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 983.860
Low
769.00
Averages
1061
High
1205
Current: 983.860
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Consumer Staples Resilience: Walmart and Costco, as consumer staples giants, have seen their stock prices increase over 10% year-to-date, demonstrating their ability to attract consumers under inflationary pressures, which underscores their resilience and market appeal in uncertain economic conditions.
- Micron Technology's Surprising Gains: Despite a recent pullback, Micron Technology's shares remain significantly up year-to-date, driven by high demand for its high-bandwidth memory and NAND flash memory crucial for AI infrastructure, indicating the potential of tech stocks in the current market landscape.
- Importance of Market Diversification: While these five stocks have provided some support to the S&P 500, the index still faces potential correction risks, emphasizing the importance of portfolio diversification to navigate future market fluctuations.
See More
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- Cost Efficiency Advantage: The Vanguard Consumer Staples ETF boasts an annual expense ratio of 0.09%, significantly lower than the average 0.73% for similar funds, making it a preferred choice for investors seeking cost-effective options during turbulent times.
See More
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- Valuation Risks: The S&P 500's Shiller CAPE ratio is nearing its highest level since the dot-com bubble burst, indicating that market valuations are high, which necessitates caution from investors regarding potential market corrections.
- Inflation-Protected ETF: The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) focuses on short-term U.S. Treasury bonds, delivering only a 3.15% return over the past decade, yet effectively safeguards investors' purchasing power during market downturns, with an annual expense ratio of just 0.03%.
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See More
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- Consumer Staples Resilience: Amid rising inflation pressures, Walmart and Costco have both seen stock price increases of over 10% year-to-date, indicating that consumers still turn to these low-price retailers when tightening their budgets, thereby enhancing their positions within the S&P 500.
- Micron Technology's Unexpected Performance: Despite a recent pullback, Micron Technology's stock remains significantly up year-to-date, primarily due to its high-bandwidth memory and NAND flash memory being critical for AI infrastructure, making it the highest-weighted tech stock outside the
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