Club meeting recap: Jim Cramer says Johnson & Johnson's post-earnings sell-off is wrong and a chance to buy

Published Tue, Apr 18 202311:39 AM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Tuesday's key moments. Dow drops with earnings in focus J & J decline misguided Starbucks undervalued? 1. Dow drops with earnings in focus Stocks fell Tuesday as Dow stocks Goldman Sachs (GS) and Club holding Johnson & Johnson (JNJ) both dropped roughly 2% as investors digested their before-the-bell earnings reports. Club holding Nvidia (NVDA) jumped more than 3% to a new 52-week high of $281.10 per share after HSBC double-upgraded the stock to buy from its equivalent of a sell. Jim Cramer said Tuesday this is traditionally not the kind of call to greet with open arms. Nvidia shares have made a big recovery this year, prompting the HSBC analysts to also raise their price target to $355 per share from $175. That PT would be about 7% higher than Nvidia's all-time high, set back in November 2021. 2. J & J decline misguided Investors are wrong to be selling J & J shares after the company's first-quarter earnings report, Jim Cramer said. In fact, he said the stock's decline is creating a buying opportunity. While J & J topped Wall Street estimates on the top-and-bottom lines, investors may have gotten worried by management's comments about foreign exchange rates weighing on J & J's long-term revenue forecasts. However, anybody selling on those remarks is misguided, Jim said. "There is nothing in this call that should merit that decline," Jim said. We'll have a full recap of J & J's quarterly results later in the day. 3. Starbucks undervalued? Shares of Club holding Starbucks (SBUX) may be "dramatically undervalued," if the coffee chain's business in China is recovering as well as Evercore ISI research analysts expect, Jim said Tuesday. In a note to clients Tuesday, Evercore raised its second-quarter China same-store sales growth estimates to flat, from a 5% decline. Evercore's revised estimates are based on strong Chinese rail data, suggesting consumers are traveling in a way that could boost visits to Starbucks' stores. Evercore issued a tactical outperform (near-term buy) recommendation ahead of Starbucks' earnings, due out May 2. The analysts have a $120 per share price target on SBUX. (Jim Cramer's Charitable Trust is long JNJ and SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.