Jim Cramer tells viewers to “buy some” Costco at a higher-than-usual earnings multiple, framing it as a value play

Costco Wholesale was among the stocks featured during a recent segment of CNBC’s Mad Money in which Jim Cramer responded to a viewer question about where to buy the shares for long-term investing.

The caller asked for an ideal entry point for Costco’s stock, weighing it against a tough market backdrop and ongoing pressures facing consumers. Cramer’s response focused less on timing the perfect bottom and more on using a valuation threshold as a guide for initiating a position.

Cramer said he would “buy some” at the current level he described as trading around 47 times earnings. He added that his expectation would be for the valuation to move toward a lower multiple, around 45 times earnings, as part of the investment setup.

He then acknowledged the concern that buying a stock and “hoping it goes lower” runs counter to how some investors approach entries. Cramer argued that his own approach mirrors the logic of shopping for value, saying he wants value “just like I want value at a store.”

Cramer’s framing implies a staged approach. He suggested that investors could start a position while the stock trades near the higher multiple he cited, and allow for the possibility that the price will “come in a little.” Under that plan, the “worst” case, in his view, is that the stock moves higher quickly out of the range he was thinking about, rather than offering additional pullback.

The segment also used Costco’s business model as a backdrop, even though the remarks were primarily about valuation and execution. Costco is a membership retailer that sells a mix of groceries, fresh food, household goods, electronics, and other categories, and it operates a range of in-store and related services such as pharmacies, optical services, and gas stations.

Cramer’s comments came as markets continue to grapple with the outlook for consumer spending. In retail and consumer stocks, investors often treat valuation as a proxy for how much growth or resilience the market is pricing in. When consumer demand is uncertain, earnings multiples can become a primary driver of stock performance, even if fundamentals remain steady.

What the segment did not provide is additional detail about Costco’s near-term earnings trajectory, specific fiscal guidance, or any concrete triggers for a change in valuation. Cramer did not cite a new Costco announcement or document in the quoted remarks, and he did not lay out a formal target price beyond the earnings-multiple framing. As a result, viewers were left with a relative-value view rather than a new, company-specific catalyst.