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Jim Cramer Still Bullish on Costco Despite Analyst Upgrades

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  Published in Stocks and Investing on Tuesday, January 6th 2026 at 16:02 GMT by CNBC

Jim Cramer Remains Bullish on Costco: Why He Sees Continued Value Despite Analyst Upgrades

Jim Cramer, a prominent figure in financial media known for his "Mad Money" show on CNBC, continues to advocate for shares of Costco Wholesale (COST) despite recent analyst upgrades and price appreciation. In a recent segment, Cramer reiterated his long-held belief that the warehouse retailer remains undervalued, even after its significant performance in 2023 and early 2024. The article on CNBC.com details Cramer’s perspective, explaining why he believes Costco's unique business model and loyal customer base provide a compelling investment opportunity.

The Analyst Chorus & Recent Performance:

The impetus for Cramer’s latest commentary stemmed from a wave of positive analyst ratings for Costco. Several firms, including Credit Suisse, have recently upgraded the stock to "outperform" or equivalent designations. These upgrades are based on several factors, primarily focusing on Costco's resilience in a challenging economic environment and its potential for continued growth. As reported by Bloomberg (linked within the CNBC article), Credit Suisse specifically highlighted Costco’s ability to maintain strong membership renewal rates even during inflationary periods. These renewals are critical; they represent a recurring revenue stream that underpins Costco’s profitability.

Costco's stock has already demonstrated impressive gains, rising significantly in 2023 and continuing its upward trajectory into early 2024. This performance reflects the growing optimism surrounding the company, but Cramer argues it doesn't fully capture the underlying value. The CNBC article points out that while the stock isn’t "cheap" by traditional metrics, it’s still reasonable considering Costco’s growth prospects and competitive advantages.

Cramer’s Core Argument: It's About More Than Just Price

Cramer’s enthusiasm for Costco isn't solely driven by analyst recommendations or short-term price movements. He emphasizes the company’s distinctive business model, which is built around offering deeply discounted goods to members who pay an annual fee. This membership model creates a powerful flywheel effect: low prices attract customers, and high membership renewal rates provide a stable revenue base that allows Costco to continue offering those low prices.

He repeatedly stresses that Costco isn't just selling products; it’s selling a lifestyle and a sense of value. The “treasure hunt” experience – the constantly rotating selection of unique and often desirable items – fosters customer loyalty and encourages frequent visits. This is more than just retail; it’s an event, something people look forward to.

The Power of Membership Renewals & International Expansion:

A key element of Cramer's argument revolves around Costco’s membership renewal rates. These rates are consistently high – typically above 90% in the US and Canada, and even higher in some international markets (as discussed in Costco's investor relations materials). This provides a predictable income stream that shields the company from many of the pressures facing traditional retailers. The article highlights how this recurring revenue allows Costco to operate on thin margins while still generating significant profits.

Furthermore, Cramer acknowledges Costco’s ongoing international expansion as a significant growth driver. The company is actively expanding its presence in markets like Japan, Australia, and increasingly, China. These international ventures offer substantial potential for long-term growth, albeit with the inherent risks associated with operating in foreign countries. The article mentions that while these expansions require considerable investment upfront, they are expected to generate significant returns over time.

Addressing Concerns: Valuation & Economic Headwinds

While bullish, Cramer isn’t completely oblivious to potential headwinds. He acknowledges that Costco's valuation is not as low as it once was and that a broader economic slowdown could impact consumer spending. However, he argues that Costco’s unique business model provides a buffer against these risks. The company’s loyal membership base tends to remain relatively stable even during recessions, as people prioritize the value they receive from their memberships.

He also notes that any potential slowdown in same-store sales growth is already factored into current analyst expectations. The key, according to Cramer, will be Costco's ability to continue attracting new members and maintaining its high renewal rates.

Conclusion: A Long-Term Perspective

Jim Cramer’s continued endorsement of Costco reinforces the idea that it’s a company best approached with a long-term investment horizon. He believes the stock's recent gains are justified, but that there is still room for further appreciation as the company continues to execute its proven business model and expand internationally. While short-term market fluctuations may impact the stock price, Cramer remains confident in Costco’s ability to deliver consistent growth and value creation over time – a sentiment echoed by the growing number of analysts who now see it as a top pick. He urges investors not to be swayed by fleeting concerns but rather to focus on the underlying strength and resilience of this unique retail giant.

I hope this comprehensive summary meets your requirements! Let me know if you’d like any adjustments or further elaborations.