Subsequent week units the tone for the whole profitable season

On Jul 10, 2021

CNBC’s Jim Cramer looked ahead to the start of the reporting season on Friday, focusing on quarterly reports from major banks and other companies in the food and travel industries.

The Mad Money host’s outlook came after Wall Street stocks rallied sharply to rebound from Thursday’s big sell-off, which helped big averages end the week higher.

“What happens next week will shape the entire winning season,” said Cramer. “If we can get some good ones, we’ll be in party mode, but a negative series of numbers from the banks and some worrying Covid stats could make for a tough season of earnings.”

Sales and earnings per share forecasts are based on FactSet estimates:

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Tuesday: PepsiCo, JPMorgan Chase, Goldman Sachs win

PepsiCo

Publication of results for the fourth quarter of 2021: 6 a.m. Conference call: 8:15 a.m.
Projected earnings per share: $ 1.53
Expected sales: $ 17.97 billion

JPMorgan Chase

Earnings release for the 2nd quarter 2021: 7:00 a.m. Conference call: 8:30 a.m.
Projected earnings per share: $ 3.16
Expected sales: $ 29.96 billion

“PepsiCo [will give] big numbers for us, but they also need to talk about how raw costs continue to rise, especially freight. JP Morgan should give us great numbers too, but they need to talk about trading and lending aren’t as strong as they should be, “Cramer said.

“I think both stocks are too high right now, given these two negatives,” he continued. “I would refrain from buying them before the receipts unless we get a significant withdrawal on Monday.”

Goldman Sachs

Publication of the results for the 2nd quarter of 2021: 7:30 a.m. Conference call: 9:30 a.m.
Projected earnings per share: $ 10
Expected sales: $ 12.13 billion

“If people are concerned about trading profits … they have to worry about Goldman because much of their business is trading profits, even if corporate financial income is very high,” he said.

Wednesday: Wells Fargo, Bank of America, Citigroup win

Wells Fargo

Earnings release for the 2nd quarter 2021: 8:00 a.m. Conference call: 11:30 a.m.
Forecast earnings per share: 95 cents
Projected sales: $ 17.77 billion

“Wells is more of a turnaround than banking history,” said Cramer. “If CEO Charlie Scharf tells us a good story about how the turnaround is going, then I think his stock can actually break away from the group, maybe even hit new highs for the year.”

Bank of America

Publication of results for the second quarter of 2021: 6:45 a.m. Conference call: 9 a.m.
Projected earnings per share: 77 cents
Expected sales: $ 21.86 billion

“If you think the economy will get stronger and interest rates will go up, and maybe even go up quickly, then you want to buy Bank of America stock right here now,” he said.

City group

Earnings release for the 2nd quarter 2021: 8:00 a.m. Conference call: 10 a.m.
Projected earnings per share: $ 1.99
Expected sales: $ 17.32 billion

“I’m not sure about the earnings quality of Citigroup, new CEO there, it’s a cheap stock, but I don’t want to stand behind it,” said the Mad Money presenter.

Delta Airlines

Earnings publication for the 2nd quarter 2021: ahead of market; Conference call: 10 a.m.
Projected earnings per share: $ 1.36
Expected sales: $ 6.14 billion

“I want to know how much damage the Delta-Covid strain is doing to Delta,” Cramer said. “We also need to know whether business travelers are finally coming back.”

BlackRock

Earnings publication for the 2nd quarter 2021: ahead of market; Conference call: 8:30 a.m.
Projected earnings per share: $ 9.31
Expected sales: $ 4.6 billion

“I sincerely hope they tell us their position on outfits like Engine # 1,” he said.

Thursday: UnitedHealth Group, Alcoa results

UnitedHealth Group

Earnings publication for the 2nd quarter 2021: ahead of market; Conference call: 8:45 a.m.
Projected earnings per share: $ 4.43
Expected sales: $ 69.47 billion

“It’s still for sale here,” said Cramer.

Alcoa

Earnings release for Q2 2021: After Market; Conference call: 5 p.m.
Projected earnings per share: $ 1.28
Expected sales: $ 2.64 billion

“They gave us a fantastic quarter last time, but now it looks like a lot of the cyclical stocks have peaked,” he said. “This is particularly important because aluminum goes into everything and the rising costs have been a major stumbling block for gross margins for many aluminum buyers.”

Friday: First Horizon, Kansas City Southern

First horizon

Publication of results for the second quarter of 2021: 6:45 a.m. Conference call: 9:30 a.m.
Projected earnings per share: 39 cents
Expected revenue: $ 771 million

“I think it could be a whopper because its core market in Tennessee is brand new,” said Cramer.

Kansas City South

Earnings publication for the 2nd quarter 2021: ahead of market; Conference call: 8:45 a.m.
Projected earnings per share: $ 2.17
Expected sales: $ 750 million

“Expect them to comment on Biden’s newfound hostility towards the industry,” he said. “I think the White House is trying to block this deal. I wouldn’t be surprised if they somehow get their way.”

Disclosure: Cramer’s charitable trust owns Wells Fargo stocks.

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