Cramer’s Earnings to Watch Next Week
What follows is “Mad Money” host Jim Cramer’s “Game Plan” for the week of Monday, May 14.
MONDAY, MAY 14
The biggest event of the week may fall on Friday, when Facebook could make its initial public offering. Cramer thinks it’s worth getting in on the Facebook IPO, by the way. Speaking of Internet IPOs, though, Groupon is scheduled to release its quarterly results after Monday’s closing bell.
(RELATED: Cramer's Take on the Facebook IPO)
“Here’s the poster boy for what we most fear about the Facebook deal: an overheated IPO stemming from mass hype that only makes money for the flippers,” Cramer said of the daily deal company, which went public in November. “Groupon doesn’t change my view on Facebook’s IPO, but it does highlight two important things: 1) that buying in the after-market when the stock is already trading is a fool’s game, 2) that if you can actually get in on the deal, you can make money even if the worst comes to pass.”
Things worked out for Groupon, even if it turned out to be everything the bears thought it would be, so Cramer thinks it will work for Facebook, too. Not to mention Facebook has the ability to generate a lot of money and has already had a couple of billion dollar revenue quarters, he added. Groupon is proof that revenues are overrated, though, as it has roughly half a billion dollars in revenues per quarter and yet its stock was still cut in half.
TUESDAY, MAY 15
Tuesday is chock-full of earnings reports from major retailers, Cramer said. Dick's Sporting Goods, The Home Depot, Saks and The TJX Companies are scheduled to report before the opening bell.
Cramer said Dick’s does a great job of selling many hot brands, such as Nike and Under Armour, but he fears the bars has been set too high.
Meanwhile, Cramer thinks Home Depot executives will likely talk about tailwinds in housing, but worries nobody will be listening.
(RELATED: Cramer: The Housing Recovery Has Just Begun)
In its latest earnings report, Cramer said Nordstrom said the wrong things. He fears Saks could do the same.
J. C. Penney will make an earnings announcement after the market’s close. On its conference call, Macy’s executives said they’re taking considerable share from J. C. Penney. Cramer wonders what it says about the near-term results of J. C. Penney CEO Ron Johnson’s strategy. Johnson may have invented Apple’s successful retail store concept, but Cramer thinks he may have set his sights a little too high at J. C. Penney.
WEDNESDAY, MAY 16
Cramer is looking forward to earnings results from Deere before Wednesday’s opening bell.
“As usual, I’m wondering how many ways Deere can screw it up this time. Back when grains were soaring, almost every quarter was accompanied by disappointing commentary,” he noted. “Now grains are getting crushed along with other commodities. One can only imagine how terrible this quarter’s commentary will be even if the numbers are fine.”
Meanwhile, Minneapolis-based Target will also report before the open. The retailer has done a great job of delivering lately and if the momentum continues, Cramer can only assume the company’s made structural changes for the better. In other words, “success could be back in this company’s DNA.”
After the bell, restaurant chain operators Jack in the Box and Red Robin Gourmet Burgers will deliver earnings. Cramer said he doesn’t usually follow either company’s earnings, but now thinks it’s worth a listen because rival Burger King will soon become public.
THURSDAY, MAY 17
Three of the “best retailers of the moment” will report on Thursday, Cramer said, namely Dollar Tree, Gap and Ross Stores.
“If I’m right about the bar being set too high going into the earlier retail names we’ve heard from, then if these get hit, we might have some good trades,” Cramer said. “All three are out executing just about everyone else in this business right now.”
Salesforce.com will also announce earnings on Thursday. Cramer said when Salesforce previously run into the quarter, it’s been a sell. When it’s been crushed going into the quarter, however, it’s been a buy. Either way, Cramer looks forwards to commentary from CEO Marc Benioff.
FRIDAY, MAY 18
As mentioned earlier, Friday will likely be all about the Facebook IPO.
“It’s either going to be valued too high and sell off, a la the many dot-com IPOs, or it’s going to cause tons of press about how we’re back in a world of no discipline and stupid investing, where one set of companies without profits are highly valued and another set are valued as if they’re big dumb cyclicals with terrible balance sheets,” Cramer said. “They are the opposite, of course, they’re bargains. “
Cramer will also watch Apple on Friday. The tech giant has the reputation of being a heavily hyped story, but Cramer said it’s actually just earnings based. If Apple was a $60 stock instead of a $600 stock, he thinks Wall Street would feel differently. Investors need just divide by ten to realize that, he complained. Nobody does, though. This shouldn’t even matter, but the market is currently driven by the need to raise cash and short stocks, Apple is a prime candidate to be reburied again.
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When this story was published, Cramer’s charitable trust owned Apple and The TJX Companies.
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