Next week will be a bellwether for the upcoming earnings season
CNBC’s Jim Cramer on Friday said that next week will be a crucial moment for determining what the upcoming earnings season will look like.
“It’s been ages since we’ve been on pre-announcement watch, where companies have to admit that things aren’t going well. Things like higher labor costs, supply chain woes and the Russia-Ukraine war. They may be playing havoc with corporate bottom lines – such havoc, that some companies may cut their forecasts next week before they are due to report,” the “Mad Money” host said.
“If we get through next week unscathed by the negative pre-announcements, it makes me feel a lot more confident that July won’t be as bad as what we’ve just been through, and it’ll make me more bullish,” he added.
Cramer said he’s keeping an eye out for the Case-Shiller Home Price Index next week to see if there’s any sign that rapidly rising housing prices have slowed due to the Federal Reserve’s interest rate hikes.
He added that he’ll be reviewing data from the Purchasing Managers’ Index, which is seen as a measure of general economic health, to further shed light on the state of inflation.
The most important number for the week, however, will be the Personal Consumption Expenditures Price Index, according to Cramer. “We must see progress in these inflation numbers, or we can expect another 50 or 75” point rate hike, he said.
Cramer also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
- Q4 2022 earnings release at 4:15 p.m. ET; conference call at 5 p.m. ET
- Projected EPS: 81 cents
- Projected revenue: $12.07 billion
“With a great executive like John Donahoe at the helm. … I think investors will look through Nike’s Chinese weakness and buy this thing,” Cramer said.
- Q4 2022 earnings release at 4:10 p.m. ET; conference call at 4:30 p.m. ET
- Projected EPS: 39 cents
- Projected revenue: $134 million
Cramer said he’s interested in knowing if the U.S. government has ordered more drones from the company to send to Ukraine.
Wednesday: General Mills, McCormick, Bed Bath & Beyond, Paychex
- Q4 2022 earnings release at 7 a.m. ET; conference call at 9 a.m. ET
- Projected EPS: $1.01
- Projected revenue; $4.8 billion
- Q2 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
- Projected EPS: 65 cents
- Projected revenue: $1.61 billion
Both General Mills and McCormick are “high quality slowdown stocks,” according to Cramer.
Bed Bath & Beyond
- Q1 2022 earnings release at 7 a.m. ET; conference call at 8:15 a.m. ET
- Projected loss: loss of $1.38 per share
- Projected revenue: $1.51 billion
“I always railed against this retailer for endlessly buying back their stock at high prices with nothing to show for it. … The cash at the till is dwindling,” he said.
- Q4 2022 earnings release at 8:30 a.m. ET; conference call at 9:30 a.m. ET
- Projected EPS: 80 cents
- Projected revenue: $1.11 billion
“Paychex will make a lot of extra money thanks to the Fed’s rate hikes, because they collect interest while they wait for people to deposit their checks,” Cramer said.
Thursday: Constellation Brands, Micron
- Q1 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
- Projected EPS: $2.52
- Projected revenue: $2.16 billion
Cramer said he believes people underestimate the company’s growth.
- Q3 2022 earnings release at 4 p.m. ET; conference call at 4:30 p.m. ET
- Projected EPS: $2.46
- Projected revenue: $8.67 billion
“I think Micron’s been hurt really severely by the Chinese lockdown and its woes may be instantly transmitted to the whole complex,” he said.
Disclosure: Cramer’s Charitable Trust owns shares of Constellation Brands.