Mad Money Game Plan: Earnings Heyday and Stock Analysis
Key Concepts: Earnings reports, growth stocks, trade talks, stock breakups, secular growth, clinical trials, consumer behavior, market disruption, rare earth minerals, online advertising.
Trade Talks and Berkshire Hathaway
Cramer begins by mentioning the usual caveats, including potential breakthroughs in trade talks with China and updates on Canada and Mexico. He then discusses Berkshire Hathaway's upcoming results, noting that while there have been "grumblings" about the stock's performance, it's understandable given Warren Buffett's impending retirement. He argues that Berkshire's "amazing properties," including Burlington Northern railroad, still make it a worthwhile investment and predicts the stock will run if the company has a good quarter.
Palantir Technologies
Cramer calls Palantir Technologies the "most controversial stock in the entire market" due to its AI-fueled software and "cult-like shareholder base" led by CEO Alex Karp. He predicts a "total blowout" that will "smoke the shorts," citing Karp's success in securing repeat business from consumer packaged goods companies and the federal government. He emphasizes that the company is "growing like a weed."
DuPont and Honeywell
DuPont, owned by the Travel Trust, is discussed as a breakup story. Cramer believes DuPont is "dramatically undervalued" and that the "parts are worth dramatically more than the whole." He notes that companies undergoing breakups, like DuPont and Honeywell, often fall into a "purgatory funk" requiring patience, but he expects investors to be rewarded.
Caterpillar and Pfizer
Caterpillar is presented as a "smooth, secular grower" due to former CEO Jim Umpleby. Cramer believes Caterpillar will print one more good quarter, riding the tailwinds of infrastructure spending and reshoring. In contrast, Cramer expresses uncertainty about Pfizer, stating that he needs to see "really dramatic results" from clinical trials, particularly those acquired with the purchase of CGM at the end of 2023. He warns that the shareholder base is becoming "very restive" and that the President may have plans against the industry.
Marriott
Cramer notes that Marriott's stock often declines even after good earnings reports, but he suggests this is usually a buying opportunity. He advises waiting until the day after the report before making a move.
Disney and McDonald's
Disney has moved up nicely, but is starting to give back some of those gains. Cramer thinks Disney Plus will be good old fashioned TV led by sports, got a little better. Theme parks continue to hum, start paying attention to cruises. They will make a ton of money. McDonald's stock has been out of sync with the company, which has improved with new offerings. He considers it a buy.
Dutch Bros and Elf Beauty
Dutch Bros and Elf Beauty are highlighted as "renegades" disrupting the coffee and cosmetic businesses, respectively. Cramer believes they have "a lot of room to grow and take share."
Eli Lilly and Novo Nordisk
Cramer is waiting for Eli Lilly's numbers with "bated breath" due to "horrendous numbers" from competitor Novo Nordisk. He speculates that Lilly might be taking share from Novo, or that the market is seeing a peak in weight loss drugs. He is concerned about potential dilution due to Novo's price cuts on Wegovy. The Investing Club sold a little Eli Lilly this week for a "huge gain."
Warner Brothers Discovery
Cramer wants to hear from Warner Brothers Discovery, as CEO David Zaslav has been reorganizing the company and paying down debt. The stock has been moving up as more facts about the impending breakup emerge and the balance sheet improves.
MP Materials
Cramer anticipates positive news from MP Materials, a rare earth minerals company, regarding its deal with the US government. He believes the White House wants to reduce reliance on China for these materials, and Apple is also buying recycled minerals.
Wynn Resorts and Pinterest
Cramer expresses renewed confidence in Wynn Resorts, noting its climb. He also highlights Pinterest as an elite online advertising platform, particularly family-friendly, despite the market not being as big as it used to be. Reddit is also mentioned in the context of social media advertising.
Wendy's
Cramer expresses concern about Wendy's, citing weak numbers and a dividend cut in the last report. He notes the intense competition in the fast-food industry and cannot guarantee positive numbers.
Conclusion
Cramer concludes that while the upcoming week is not as big as the previous one, it is still significant. He encourages viewers to "stay with Cramer."
Key Takeaways:
- Earnings season continues with a focus on individual company performance and industry trends.
- Breakup stories like DuPont can offer value, but require patience.
- Secular growth stories like Caterpillar remain attractive.
- Clinical trial results are crucial for pharmaceutical companies like Pfizer.
- Disruptive companies like Dutch Bros and Elf Beauty have significant growth potential.
- Geopolitical factors, such as rare earth mineral dependence on China, can influence stock performance.
- Online advertising platforms like Pinterest offer targeted opportunities.
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