Jim Cramer says to buy Costco's stock after its 'absurd' post-earnings decline

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CNBC's Jim Cramer pushed back against Wall Street's concerns about Costco, saying investors should buy the stock after its post-earnings decline.

The stock fell 1.27% during Friday's session to close at $342.58 per share, even after Costco one day earlier beat Wall Street expectations on the top and bottom lines. Sales of $53.38 billion eclipsed analyst forecasts of $52.08 billion, while per-share earnings of $3.04 was 20 cents better than estimates.

Cramer also said he was not really worried about customer retention being an issue for Costco. For starters, he said, shoppers have to have a membership, "so the customer base is as sticky as it gets." Costco's stock is up 15% so far in 2020 and 18% in the past 12 months. It notched an all-time high of $363.67 on Sept. 3. As of Friday's close, it sits almost 6% below that peak.

For example, he pointed to an outdoor heater that sells for $399 at Costco while it is listed for $599 on. "You heard me right, they're undercutting Amazon by 200 bucks. Once the pandemic subsides, are you really gonna go back to Amazon, or any other retailer, when you can get stuff for so much less from Costco?" he said.

 

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Why to pumphis profits in his Action Alerts account?🤦‍♂️

Screw Jim Cramer!

I'm going to go bet the farm on the absurd 1% pullback on the company trading at a mere 39X earnings

Buy stock. People are worrying about whether or not they can put FOOD on the table, and you’re telling people to buy stock.

Nope. Not until they start the food samples again. I am protesting. 😢

What these losers saying now ?

Yeah bc they didn’t have PS5s

It’s ridiculous that the market would penalize a company for compensating its employees properly.

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