Cramer’s Earnings Preview for Next Week
What follows is "Mad Money" host Jim Cramer's "Game Plan" for the week of Monday, Oct. 15.
MONDAY, OCT. 15
Citigroup will report earnings before Monday's opening bell. Although earnings results from rivals JPMorgan Chase and Wells Fargo failed to excite Wall Street Friday, Cramer thinks the banking sector is still worth a look.
(Related: Big Opportunity in Banks: Pro.)
"The group is cheap. The companies are making tons of money and they will soon be returning billions of dollars to shareholders, " Cramer said. "They're making gobs of cash thanks to the robust mortgage market."
Unfortunately for Citi, though, Cramer doubts it will have enough mortgage business to offset its weakness in emerging markets.
"I'd stick with JPMorgan and buy more Wells Fargo before I'd venture into the world of Citigroup, though, " he added.
(Read More: Are JPMorgan's Revenue Springs Drying Up?)
TUESDAY, OCT. 16
Coca-Cola is scheduled to deliver earnings Tuesday morning.
"KO shot the lights out last quarter and I bet it's even better this time because the dollar has gotten weaker versus where it was the last time they reported, " Cramer said. "That's going to make for a potential upside surprise for this huge international company."
Coke has produced "incredibly strong" sales numbers in Asia lately, Cramer said. It's a very well-run company, too. He thinks its stock is worth considering.
Goldman Sachs is also slated to report earnings before Tuesday's open.
"Has the government curtailed the opportunities Goldman used to have to make lots of money?" Cramer asked. "Has the bountiful corporate bond issuance business made up for the dearth of IPOs and mergers and acquisitions?"
Cramer hopes the investment bank will give a sense as to whether business is really coming back.
Meanwhile, Cramer will also listen for earnings results from Johnson & Johnson .
Cramer noted Alex Gorsky, the company's new CEO, has been at the helm for some time. So he hopes to hear about a possible break-up. If Gorsky does mention something along those lines, Cramer thinks the stock could instantly shoot $15 higher.
After the close, Cramer will look for IBM's earnings report.
"Consistent grower. Taking share. Buying back stock with a new hardware product cycle – very few stocks give you what IBM has, " Cramer said. "And my charitable trust is betting that IBM delivers once again despite the slowdown in Europe."
WEDNESDAY, OCT. 17
Bank of America will announce earnings before Wednesday's opening bell.
"The great untold story about this company is how it has systematically been cleaning up its balance sheet and buying in expensive debt left over from the bad old days, " Cramer said. "With fewer foreclosures and some major settlements for liabilities, Bank of America is putting the past behind it."
So long as the bank stocks continue to get hammered, Cramer thinks BAC is a buy ahead of earnings.
PepsiCo will also report earnings Wednesday morning.
To Cramer, Pepsi's last quarter was terrific. Cramer thinks its restructuring plans are already paying off while the company's international growth will provide upside for its stock. He hopes executives break down the strength of particular brands on a country-by-country basis and address New York City's recent ban on large-sized sodas.
THURSDAY, OCT. 18
Union Pacific is expected to report earnings before Thursday's open.
From its assessment of the coal industry, crops or intermodal freight, Cramer said there are many reasons to listen to this railroad's conference call.
Union Pacific has re-priced many of its contracts lately, too, which should improve margins. To Cramer, this stock might be worth buying on a pullback ahead of the quarter.
After the close, Chipotle Mexican Grill will report its quarterly results. To Cramer, this is a "battleground" stock.
"A bunch of boutique investment firms came out in the last few days, saying alternately that same-store sales are back on a higher trajectory for Chipotle and that those sales would disappoint, " Cramer said. "I don't know who to believe, but unless we hear about a 9 to 10 percent same store-sales gain, I think you're going to get still one more leg down in this stock, as there are a lot of smart short-sellers in the name."
Google will also deliver earnings Thursday. Cramer thinks this will be one of the hottest momentum stocks going into the end of the year. For those interested in playing it ahead of the quarter, he recommends deep-in-the-money call options.
Speaking of tech, Microsoft is also expected to announce earnings Thursday. The company will likely discuss Window 8, which it's preparing to launch soon. Being as the PC market is struggling, though, Cramer wonders how bad Microsoft's quarter could be.
FRIDAY, OCT. 19
Cramer will look for General Electric to report earnings Friday. The conglomerate has been very bullish lately, Cramer said. He wonders how much more bullish executives will be on the conference call, including the possibility of dividend boost.
Finally, Honeywell will also announce earnings Friday.
"This is about the only major industrial that has consistently guided above the street or reaffirmed with some degree of upside, " Cramer said. "The world has slowed since it spoke last, though, and I fear the streak may be broken. If so, and you can get this stock in the mid-$50s, it will be a steal."
When this story was published, Cramer's charitable trust owned Coca-Cola, General Electric and IBM.