CNBC's Jim Cramer takes a look at PepsiCo's earnings report and reveals how investors should play stocks this earnings season. The "Mad Money" host gets to the bottom of Constellation Brands' earnings report with CEO Bill Newlands after shares cratered more than 6% in the session. Later in the show, the investment guru issues the green light to build a position in Ulta Beauty's rebound and explains why looming tariffs on European Union countries could further weigh the economy and President Donald Trump's 2020 prospects.
CNBC's on Thursday said investors should judge quarterly reports this earnings season on a nontraditional metric: "not as bad as feared."
Many stocks have fallen so far off their highs that the conventional "better-than-expected" measure won't do the trick, said the "Mad Money" host, who based his thesis on the turned in earlier that day.
The beverage producer's stock had fallen nearly $4 heading into earnings. Shares rallied nearly 3% in the session to new all-time highs.
"Yesterday, Wall Street was concerned that PepsiCo would fail to deliver better-than-expected numbers," Cramer explained, but the "results were not as bad as feared."
"Yes, Ulta's last quarter was a disaster. I wish I'd seen it coming," the host said. "But with insiders buying again and the stock looking cheap versus its growth rate, I think Ulta's too tempting here to ignore when it's going down."
-Reporting from Kevin Stankiewicz
Constellation Brands CEO Bill Newlands suggested that investors may have been confused about its quarterly report after shares fell more than 6% on Thursday.
The alcoholic beverage company reported weaker-than-expected wine sales and an earnings offset from its stake in Canadian marijuana producer Canopy Growth. Total revenue grew nearly 2% to $2.3 billion, beating expectations, and shareholders took home $2.72 per share.
"What I think people may have gotten mixed up in a little bit is some of the accounting treatments around Canopy," Newlands told Cramer in an interview. "Let's face it: $757 million is a big number, and that number is how much we're up in our total investment in Canopy since we made the initial investment."
In Cramer's lightning round, the "Mad Money" host zips through his thoughts about viewers' stock-picking questions.
: "I think it's in good shape and I want to buy Yeti."
Mosaic Co.: "No. You know Mosaic, that's a commodity business. I have always shied away from commodity businesses on this show and it's never hurt me that that's my view."
: "You are going to run into the fact that they lost [former CFO] Sarah Friar and the stock has never moved up ever since Sarah Friar left the company. So I like Square, but it is really incredible how one person can mean so much. I think that company is a good company."
Disclosure: Cramer's charitable trust owns shares of PepsiCo.