Costco is more expensive than Nvidia after Uber partnership: Cramer still says ‘buy’

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on May 16, 2024
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  • Uber Eats announced a partnership with Costco on Thursday.
  • $COST is now more expensive than Nvidia in terms of forward P/E.
  • Famed investor Jim Cramer still remains bullish on Costco stock.

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Costco Wholesale Corporation (NASDAQ: COST) is trading at an all-time high after Uber Eats teamed up with the retail behemoth on Thursday.

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Details of Costco-Uber partnership

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Users can now have groceries and other merchandise delivered from Costco via Uber Eats. Members of the wholesale club will get better pricing as well as a 20% discount on Uber One.

$COST is now trading at a forward price-to-earnings multiple of nearly 50 which makes it even more expensive than Nvidia at 36 only.

And that’s when the semiconductor behemoth is expected to roughly double its earnings over the next year while Costco Wholesale is estimated to grow the same metric at a mid-single-digit only.

Wall Street currently has a consensus “overweight” rating on Costco stock that pays a dividend yield of 0.58% at writing.

Cramer is bullish on Costco stock

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Despite a well over 20% year-to-date gain in shares of Costco Wholesale Corporation, famed investor Jim Cramer continues to recommend buying the retail stock.

He’s particularly convinced that $COST is worth owning after peer Walmart Inc reported a strong quarter and raised its future guidance on Thursday (read more).

I continue to think Costco is the stock to buy off of Walmart. Costco and Walmart are where this frugal consumer goes.

Price-friendly retail stores like Costco Wholesale are attractive for the consumer amidst sticky inflation and concerns related to the U.S. economy. The big box retailer is expected to earn $3.7 a share in its current financial quarter versus $3.43 per share a year ago.

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