'Next week will be pivotal'


Earnings season will come to a close next week and many corporations have pleased Wall Street with the numbers they’ve posted thus far, CNBC’s Jim Cramer said Friday.

Last quarter was “one of the best we’ve seen in ages,” likely because expectations were already lowered amid the ongoing health crisis, he said.

“If you find yourself wondering why stocks can keep roaring when we’re at an insane number of Covid infections, the answer’s simple,” the “Mad Money” host said. “To paraphrase James Carville, it’s the earnings, stupid. Big business is making a ton of money right now. Frankly, it’s not that complicated.”

The Dow Jones climbed almost 400 points, or 1.37%, to a 29,479.81 close. The S&P 500 surged 1.36% to a record close of 3,585.15 and the Nasdaq Composite moved 1% higher to 11,829.29. The major indexes powered through a slightly volatile week, buoyed by encouraging vaccine research news in the fight against the pandemic.

Meanwhile, the U.S. continues to set record daily coronavirus case counts and hospitals across the country are saddled by growing hospitalization rates.

“If you’re more worried about the virus than encouraged by the vaccine, next week will be pivotal for you because we hear from some major national retailers and I think they’ll have a surprisingly positive story to tell,” Cramer said.

Cramer presented his market playbook for the week ahead. All earnings projections are based on FactSet estimates:

Monday: Palo Alto Networks, Tyson Foods earnings

Palo Alto Networks

  • Q1 fiscal 2021 earnings release: before market; conference call: 8 a.m.
  • Projected EPS: $1.33
  • Projected revenue: $922 million

“CEO Nikesh Arora has put together a terrific set of assets for an economy where millions of people are staying or stuck at home working,” Cramer said. “I expect very strong numbers.”

Tyson Foods

  • Q4 fiscal 2020 earnings release: before market; conference call: 9 a.m.
  • Projected EPS: $1.19
  • Projected revenue: $11.01 billion

“The meat processor had a major Covid problem that now seems to be behind them … but the stock is stalled here,” he said. If they deliver, “this $62 stock is going to go up a great deal.”

Tuesday: Walmart, Home Depot, Kohl’s, Nio earnings

Walmart

  • Q3 fiscal 2021 earnings release: 7 a.m.; conference call: 8 a.m.
  • Projected EPS: $1.18
  • Projected revenue: $132.08 billion

Home Depot

  • Q3 earnings release: 6 a.m.; conference call: 9 a.m.
  • Projected EPS: $3.05
  • Projected revenue: $31.78 billion

“Both should report spectacular earnings,” Cramer said about the retailers. “Anything less than spectacular, though, and these stocks will get hurt.”

Kohl’s

  • Q3 earnings release: before market; conference call: 9 a.m.
  • Projected losses per share: 45 cents
  • Projected revenue: $3.87 billion

“The quarter’s very important to the broader market because Kohl’s is not an essential retailer, which makes it a good gauge of whether consumers are willing to venture out for non-essentials.”

Nio

  • Q3 earnings release: after-market; conference call: 7 p.m.
  • Projected losses per share: 18 cents
  • Projected revenue: $659 million

“I think people will keep buying this stock as Nio continues to ramp up production, because if it is the next Tesla that means you don’t need to care about th short-term,” he said. “For the moment, it’s more of a concept than a company. Long-term, though, they have to deliver.”

Wednesday: Target, Lowe’s, TJX Companies, Nvidia earnings

Target

  • Q3 earnings release: before market; conference call: 8 a.m.
  • Projected EPS: 1.60
  • Projected revenue: $20.79 billion

“The expectations have gotten incredibly high, and will even get higher if Walmart’s good,” Cramer said. “That makes it hard to beat.”

Lowe’s

  • Q3 earnings release: before market; conference call: 9 a.m.
  • Projected EPS: $1.98
  • Projected revenue: $21.13 billion

“CEO Marvin Ellison is doing his best to turn around the operation. Still has some issues, although it’s being buoyed by the pandemic,” the host said. “Lowe’s isn’t quite there yet, but the numbers should be so strong that you won’t even notice.”

TJX Companies

  • Q3 fiscal 2021 earnings release: 9:30 a.m.; conference call: 11 a.m.
  • Projected EPS: 40 cents
  • Projected revenue: $9.39 billion

“We sold this off-price chain for my charitable trust,” he said. “Short-term I don’t see them bringing in many customers because they don’t carry anything you can’t live without.”

Nvidia

  • Q3 fiscal 2021 earnings release: 4:20 p.m.; conference call: 5 p.m.
  • Projected EPS: $2.57
  • Projected revenue: $4.41 billion

“I, for one, am glad this stock’s been coming down this week, because that makes it easier for the stock to blast off in response to a fantastic quarter, which exactly what I expect,” he said.

Thursday: Macy’s, Workday earnings

Macy’s

  • Q3 earnings release: before market; conference call: 8 a.m.
  • Projected losses per share: 83 cents
  • Projected revenue: $3.91 billion

“The company’s done a lot to turn itself around … [but] in this environment it may not work,” Cramer said.

Workday

  • Q3 fiscal 2021 earnings release: after-market; conference call: 4:30 p.m.
  • Projected EPS: 67 cents
  • Projected revenue: $1.09 billion

“This is one of the toughest to gauge … [because the] software that they use to automate human resources and finance is a little opaque for most Americans to understand the stock,” he said. “The company’s winning contract after contract, but people don’t understand it. I think it’s a really well-run company.”

Friday: Foot Locker earnings

Foot Locker

  • Q3 earnings release: before market; conference call: 9 a.m.
  • Projected EPS: 57 cents
  • Projected revenue: $1.89 billion

“I’d rather just have you in Nike,” he said.

Disclosure: Cramer’s charitable trust owns shares of Nvidia, Walmart and Nike.



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