Costco (COST) “Should be Repudiated This Quarter,” Says Jim Cramer

We recently published 9 Stocks Jim Cramer Talked About.  Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks Jim Cramer talked about.

Costco Wholesale Corporation (NASDAQ:COST) is one of Jim Cramer’s favorite stocks. Despite the fact that the shares are down by 4.8% over the past year, the CNBC TV host has remained a fan. Costco Wholesale Corporation (NASDAQ:COST)’s shares experienced analyst attention in December when Guggenheim and Telsey discussed them. The former remarked that investors were focused on the retailer’s membership renewal rates as it kept a Neutral rating. Telsey discussed sales growth and membership figures as it reiterated an Outperform rating and a $1,100 share price target. More recently, Mizuho upgraded Costco Wholesale Corporation (NASDAQ:COST) to Outperform and added it to its Top Picks list. Some of the factors that the bank cited included the belief that the retailer was simply experiencing too much demand and lower costs, along with top-line growth. Cramer pointed at the long-term share price performance and discussed the renewal rates:

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“We all talked last year, Carl, about how Costco was on the new low list endlessly. Mizuho recommends it today, and I’m gonna talk about this tonight. I think that, it’s never been a cheap stock. Still sells at 43 times earnings. But, the piece did talk about how, the insatiable demand. I’m gonna have it from the point of view of the chart, where my favorite chart it says, it’s the best there is. Which is interesting because, I have been a short term sufferer, long term lover of Costco, and I’ve always liked shopping.

“Renewal rates are disappointing. . .that’s why it’s been going down and they better address that. That and the CFO calling the customer more choiceful, given the fact that Costco is the lowest. It’s historically been the lowest. I question that choiceful analysis and I think it should be repudiated this quarter.”

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Disclosure: None. This article is originally published at Insider Monkey.