CVS: Cramer said this will be one of the most critical shareholder calls to come this earnings season. As Amazon makes a foray into health care, CVS has aimed to bolster its competitive stance with its acquisition of health insurer Aetna. It’s a part of the company’s strategy to change focus from a brick-and-mortar franchise to a services industry.
But there are concerns that integration challenges could force the drug store giant to lower its guidance.
“I think many people are waiting for this quarter to be out of the way … [to] get those lower numbers before they buy the stock,” Cramer said. “So even if CVS does shave down its guidance the stock might jump as long as they don’t take their full-year earnings estimates below $7. That’s the magic number. And if they don’t cut their numbers, well holy cow this thing is going to $75 in a straight line.”
Bausch Health: Cramer has been impressed by CEO Joe Papa’s leadership and expects him to show more progress when the company delivers its earnings report before the open. He notes that Bausch has loaded on debt, but he thinks investors should focus instead on new drugs.
“With the stock trading at less than seven times this year’s earnings estimates again kept down by that debt load, it’s too cheap to ignore,” Cramer said.
Analog Devices: Semiconductor companies have had a bumpy road, particularly those dealing with cellphones. But Analog Devices is one of the exceptions that could see positive results.
“Analog Devices … has been one of those winners,” Cramer said. “This company is all about the internet of things, IOT, and I believe they’ll put up a good quarter.”
Hormel Foods: Cramer said he’ll put his thesis that there is little safety in safety stocks to the test when Hormel Foods, the owner of brands like Spam, Dinty Moore, Apple Gate Farms, Justin’s, and Wholly Guacamole.
Hormel Foods is the food company responsible for a range of brands including Spam, Dinty Moore, Apple Gate Farms, Justin’s, and Wholly Guacamole.
“I think these latter brands are the reason why Hormel’s stock has left its packaged food companies … in its sector right in the dust,” Cramer said.