Jim Cramer’s Game Plan: 12 Stocks in Focus This Week

Jim Cramer, the host of Mad Money, recently discussed some of the week’s important market events, focusing on earnings reports from different companies, including major banks and new data from the Labor Department.

Cramer expressed hope that the wildfire situation would bring some positive news. He acknowledged the challenges natural disasters bring, but pointed out that government and insurance companies are working to stabilize the situation. While Cramer made it clear that he doesn’t support exploiting tragedy for profit, he also noted that some retailers tend to benefit during such times as people begin rebuilding.

He mentioned that while some of these stocks have already seen gains, there may still be room for growth, especially as insurance payouts and government funds flow toward reconstruction efforts.

“How about the other side of the trade? Here I’m talking about earnings. Can great earnings triumph over a sour bond market? We’re going to find out for certain because this is a week we associate with bank earnings and there’s a lot of misconceptions about the banks. We know that when they make the wrong bets on the bond market, like two years ago, their stocks can take some real nasty hits. But when their bond portfolios are good, like they are today, they can withstand or even profit from higher rates so let’s not write these stocks off.”

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Regarding the JPMorgan Healthcare Conference, Cramer noted that this is a major event where nearly every drug and healthcare company presents updates. He expects some exciting developments, despite current economic conditions. However, he cautioned that drug stocks are still highly sensitive to interest rates, which, in many cases, are more influential than even a company’s pipeline or earnings. Cramer discussed the Producer Price Index (PPI) and the Consumer Price Index (CPI), which are scheduled for release on Tuesday.

“It needs to come in cooler if there’s any hope that interest rates could reverse and the Fed can regain some of its lost credibility, stemming from cutting in a hurry when we now know there was no need to do so. I think it’s possible that these numbers are gonna be cooler than the labor report, but not enough to justify our appeal of today’s losses.”

Wednesday’s market action would bring more attention to bank earnings, Cramer explained, noting that banks would likely receive an initial boost from higher interest rates, particularly through products like certificates of deposit, which offer lower rates than what banks can earn by investing in the bond market. While this provides a short-term benefit, it could make these stocks worth holding in the interim.

“Bottom line: If you’re a bull or at least trying to make sense of this market, well, you know a market that goes down on seemingly good news, all I can say is that the stock market that gets surprised may seem like it’s reacting inappropriately until you see its master, the bond market, explain everything by the direction of interest rates. For now, that’s the key determinant of the entire stock market, even as there are pockets of positivity that can escape the bond market’s tyranny.”

Jim Cramer's Game Plan: 12 Stocks in Focus This Week

Jim Cramer’s Game Plan: 12 Stocks in Focus This Week

Our Methodology

For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 10. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Jim Cramer’s Game Plan: 12 Stocks in Focus This Week

12. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 65

Cramer mentioned that while Schlumberger Limited (NYSE:SLB) stock has been down for a few quarters, it might report something good in its fourth quarter and full-year earnings report on Friday.

“Finally on Friday, I’m watching out for SLB. That’s the old Schlumberger, they don’t call it that anymore. As we’ve seen a few weeks of rising oil prices, I know that’s not enough to turn around SLB’s fortunes, it’s been down in the dumps for a year and four months. A few weeks of good oil news won’t change that, but I think that the company might give us a more positive forecast given that there’s certainly more drilling optimism around even as SLB’s a very international company.”

Schlumberger (NYSE:SLB), a leader in areas such as carbon management and energy systems integration, addresses various elements of the global energy landscape. The company has reported an adjusted EBITDA of $6.687 billion for the first nine months of 2024, an increase from $5.830 billion in the same period of 2023. Its adjusted EBITDA margin also improved, reaching 24.8% for the first nine months of 2024, up from 24.1% in 2023.

The company expects ongoing margin expansion to drive full-year adjusted EBITDA margins of 25% or higher for 2024. The company’s strong cash flow, coupled with the sale of its Palliser asset in Canada, is expected to support greater returns to shareholders.

Schlumberger (NYSE:SLB) CEO, Olivier Le Peuch, addressed the challenges facing the commodity market, including oversupply, reduced demand, and slower economic growth, particularly in regions like China, the U.S., and Europe. Despite these pressures, the company maintains confidence in the long-term outlook for the oil and gas industry. However, the company does not foresee a near-term recovery in North American activity. Schlumberger sees a modest increase in upstream spending in international markets in 2025 while spending in North America is expected to remain flat or decline slightly.

11. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)

Number of Hedge Fund Holders: 39

J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is one of Cramer’s favorite companies and he called it a “barometer of business”.

“After the close, we get results from one of my favorite companies, J.B. Hunt, it’s the giant trucker. I see this company as more of a barometer of business because it does such a tremendous job of breaking down the strong and weak parts of the economy line by line by line.

These days the transports everyone wants though are the airlines. Just look at the positive reaction to Delta’s numbers this morning. I think we need to keep in mind that when you get really strong earnings like the ones from Delta, they can indeed transcend the market’s negative gravitational pull. [The] stock looked good today, finished up 9%.”

J.B. Hunt (NASDAQ:JBHT) offers a variety of transportation, delivery, and logistics solutions, utilizing a range of company-owned equipment and services. In its third-quarter earnings call, management discussed the challenges the company has faced in the freight environment, highlighting its ongoing focus on controlling costs. While dealing with these challenges, the company has made considerable strides in right-sizing its cost structure to better adapt to the current market conditions.

On January 10, Raymond James increased its price target on the stock to $200 from $195, maintaining an Outperform rating on the stock. The transportation sector faced challenges in 2024, driven by continued earnings revisions from 2023, evolving port dynamics, and uncertainty surrounding the election, which affected various modes of transportation. While many of these issues have been resolved heading into 2025, election-related concerns, particularly regarding potential tariffs, are still a key focus.

The firm cautions that the imposition of tariffs could hinder the freight market’s recovery. Furthermore, J.B. Hunt (NASDAQ:JBHT) has adjusted its expectations for net capital expenditures in 2024 to about $625 million, a decrease from its earlier forecast of $650 million to $700 million.

10. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 112

Cramer predicted that UnitedHealth Group Incorporated (NYSE:UNH) will report terrific earnings this week.

“The biggest health insurer UnitedHealth Group reports too. Now we know this company has been in the news sadly, after one of its highest-level executives was murdered. This group’s had strong earnings of late, including, really, I mean terrific. They just got some good news from Medicare too this very evening. So they’re no longer dealing with a post-Covid hangover, they’re getting better return from the government and you know what, I suspect UNH is gonna have an excellent quarter. So what can I say? These stocks, probably gonna work. ”

UnitedHealth Group (NYSE:UNH) is a large, diversified healthcare company providing a wide range of services and products across various sectors. It has set a long-term growth target of 13% to 16%. For the full year 2024, the company’s net earnings guidance is between $15.50 and $15.75 per share. This forecast reflects factors such as the sale of its South American operations in the first half of 2024 and the impacts of a cyberattack on Change Healthcare.

Insurers have expressed concerns in recent years about rates being insufficient to cover growing medical costs, which have affected earnings and stock prices. Recently, The Centers for Medicare and Medicaid Services (CMS) suggested that Medicare Advantage plan payments could rise by an average of 4.3% in 2026, a more substantial increase than the current year as per BNN Bloomberg. When excluding changes in patient risk scores, which typically boost revenues, the payment rise would still be a healthy 2.2%.

This proposed hike would represent the largest increase in Medicare payments since 2023. Health insurance providers that offer private Medicare Advantage plans in the U.S., including UnitedHealth, are likely to see a significant increase in payments in 2026, should a proposed change by the incoming Trump administration be implemented.

The proposed adjustments would allocate an additional $21 billion to Medicare Advantage providers in 2026 compared to the previous year. UnitedHealth Group (NYSE:UNH) has a significant presence in the Medicare Advantage market, accounting for 29% of enrollment in 2024. In nearly 29% of U.S. counties, UnitedHealth held at least 75% of the Medicare Advantage enrollment, according to data from the Kaiser Family Foundation.

9. The PNC Financial Services Group, Inc. (NYSE:PNC)

Number of Hedge Fund Holders: 51

As per Cramer, among the banks reporting on Thursday, The PNC Financial Services Group, Inc. (NYSE:PNC) is the best one to report.

“Thursday we have more of the same. This time, Bank of America, U.S. Bancorp, Morgan Stanley, and PNC Financial. I actually expect all these to be good too. But the best one, the most admirable [is] likely to be PNC. You know, PNC has become kind of a cult bank stock.”

PNC Financial (NYSE:PNC) is a diversified financial services company offering a wide range of products, including loans, credit cards, mortgages, insurance, and investment management. As of the third quarter of 2024, the company reported average total assets of $569.5 billion, reflecting an increase of $6.5 billion compared to the previous quarter and a rise of $14.6 billion compared to the same period in 2023.

This growth was mainly driven by a higher balance in Federal Reserve Bank accounts and an uptick in investment securities. The company expects that its average loans will remain relatively stable for the fourth quarter of 2024. Net interest income is expected to grow by about 1% compared to the third quarter.

However, PNC Financial (NYSE:PNC) forecasts its fee income (on a non-GAAP basis) to decrease by 5% to 7%. In contrast, the company expects an increase in other noninterest income, which could rise to between $150 million and $200 million compared to the prior quarter. Overall, total revenue is anticipated to remain stable during this period.

8. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 55

Cramer expects Morgan Stanley (NYSE:MS) to report solid earnings on Thursday.

“Thursday we have more of the same. This time, Bank of America, U.S. Bancorp, Morgan Stanley, and PNC Financial. I actually expect all these to be good too.”

Morgan Stanley (NYSE:MS) is a financial services firm offering a variety of financial products, including capital raising, financial advisory, brokerage, and investment management services. Through the first nine months of the year, the company achieved $200 billion in organic growth. In the third quarter of 2024, the company saw a rise in advisory revenues, which totaled $546 million. This increase was driven by a modest uptick in completed M&A transactions, with particular strength in the Europe, Middle East, and Africa (EMEA) region.

CEO Ted Pick discussed several key trends in the financial markets, particularly in the IPO and private equity sectors. He highlighted that sponsors in the IPO market currently have approximately $1.3 trillion in available capital, referred to as “dry powder.” He also pointed out that portfolio companies in the market amount to between $3 trillion to $4 trillion, spanning around 10,000 firms.

Morgan Stanley’s (NYSE:MS) Pick noted a significant shift in market behavior, emphasizing that, for the first time in nearly 15 years, capital deployment in private equity is outpacing fundraising. Despite the challenges faced by these markets, he expressed optimism about the eventual return of IPOs, particularly from larger companies, as the IPO market gradually gains momentum.

7. U.S. Bancorp (NYSE:USB)

Number of Hedge Fund Holders: 46

During Friday’s episode, Cramer mentioned U.S. Bancorp (NYSE:USB) and commented:

“Thursday we have more of the same. This time, Bank of America, U.S. Bancorp, Morgan Stanley, and PNC Financial. I actually expect all these to be good too.”

U.S. Bancorp (NYSE:USB) is a financial services holding company offering a wide range of products, including depository services, lending options, credit card services, asset management, insurance, investment products, and corporate services. Management expects net interest income for 2024 to be at the higher end of the previously estimated range of $16.1 billion to $16.4 billion, indicating stability in the fourth quarter relative to the third.

For the full year, the company forecasts mid-single-digit growth in non-interest income, though it may fall at the lower end of the range. Additionally, U.S. Bancorp (NYSE:USB) expects adjusted non-interest expenses for the year to total $16.8 billion. While no formal guidance has been provided for 2025, management has indicated that the company expects continued positive operating leverage moving forward.

6. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 98

Bank of America Corporation (NYSE:BAC) was mentioned in Friday’s episode and here is what Mad Money’s host had to say:

“Thursday we have more of the same. This time, Bank of America, U.S. Bancorp, Morgan Stanley, and PNC Financial. I actually expect all these to be good too.”

Bank of America (NYSE:BAC) is a well-established financial institution that provides a broad range of banking and financial services, including savings and checking accounts, loan options, investment management, and wealth management solutions. As per the company’s plans, it is focused on expanding its presence and aims to open more than 165 new centers across 63 markets by the end of 2026.

It includes nearly 40 new centers in 2024 and adds to the more than 100 centers the company has already launched over the past two years. Additionally, in January, the bank also reported significant growth in its Consumer Investments business, which has surpassed $500 billion in client assets. This marks a more than tenfold increase since the business was first launched a decade ago. The Consumer Investments division now includes nearly 4 million client accounts, spanning Merrill Edge Self-Directed and Merrill Guided Investing.

For 2025, Bank of America (NYSE:BAC) expects a return to growth in net interest income (NII) and forecasts a return to operating leverage. The bank is also focused on maintaining discipline around expenses, which is expected to improve its efficiency ratio. For the fourth quarter, the company expects NII to grow and projects it will reach $14.3 billion or more on a fully tax-equivalent basis, though several variables will influence this outcome.

5. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 88

Cramer mentioned banks like Citigroup Inc. (NYSE:C) and remarked:

“On Wednesday, we’re gonna hear from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup. I think they’re all gonna be pretty darn good. Plus, given the environment has improved for mergers and acquisitions, as we’ve seen already this year, we gotta have some excellent forecast. I like these stocks and they’re well off their highs with very low price-to-earnings multiples. Could it be a real opportunity? I think so. We’ve been buying a bunch of them for the Charitable Trust because a robust economy often produces the best results for these companies. Regardless of the bond market or the Fed. We have less, fewer credit problems.”

Citigroup (NYSE:C), a prominent global financial services firm, provides a broad spectrum of financial products including cash management, trading, and investment banking services. According to CFO Mark Mason at the Goldman Sachs 2024 U.S. Financial Services Conference, the company is on track to meet its revenue forecast for 2024, which is projected to fall between $80 billion and $81 billion. Mason noted that net interest income has exceeded expectations for the year.

While expenses are expected to reach the higher end of initial guidance, he expressed confidence that positive operating results would extend into 2025 and beyond. For the fourth quarter, the company expects a significant rise in investment banking fees, which are forecasted to increase by 25–30%. Additionally, Markets revenue is expected to grow by a high teen percentage.

However, Citigroup (NYSE:C) faces challenges related to its long-term profitability targets. As reported by the Financial Times, analysts on Wall Street are skeptical about the bank’s ability to meet its profitability goals. Specifically, they project its return on tangible common equity will be just over 9% next year, significantly lower than the 11% to 12% target set by CEO Jane Fraser in 2022 for 2026. To meet these goals, Fraser has been working to streamline the bank, including exiting consumer banking operations in 13 countries.

4. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 72

Cramer said that stocks like Wells Fargo & Company (NYSE:WFC) have low price-to-earnings multiples these days, which presents a buying opportunity.

“On Wednesday, we’re gonna hear from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup. I think they’re all gonna be pretty darn good. Plus, given the environment has improved for mergers and acquisitions, as we’ve seen already this year, we gotta have some excellent forecast. I like these stocks and they’re well off their highs with very low price-to-earnings multiples. Could it be a real opportunity? I think so. We’ve been buying a bunch of them for the Charitable Trust because a robust economy often produces the best results for these companies. Regardless of the bond market or the Fed. We have less, fewer credit problems.”

Wells Fargo (NYSE:WFC) is a major global financial services firm that provides a wide range of banking, investment, mortgage, and financial products. The company provides essential services to individuals, businesses, and institutions. Looking ahead, it expects a 9% decline in its net interest income (NII) in 2024.

NII represents the difference between the bank’s earnings from loans and the interest it pays out to depositors. However, as reported by Reuters, the bank’s Chief Financial Officer, Michael Santomassimo, noted that NII could see some improvement due to rate cuts, as these cuts would lower the costs of retaining deposits. Santomassimo explained that the decline in interest rates on products like certificates of deposit, promotional savings instruments, and most interest-sensitive deposits within the commercial banking division is expected to continue.

As the bank’s need to pay depositors decreases with the ongoing rate cuts, it could result in a positive impact on NII in the longer term. According to Santomassimo, Wells Fargo (NYSE:WFC) expects NII to stabilize and possibly reach a trough by the fourth quarter of 2024, marking the lowest point before it begins to recover.

3. The Goldman Sachs Group, Inc. (NYSE:GS)

Number of Hedge Fund Holders: 72

Cramer expressed optimism about banks like The Goldman Sachs Group, Inc. (NYSE:GS) reporting their earnings this week.

“On Wednesday, we’re gonna hear from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup. I think they’re all gonna be pretty darn good. Plus, given the environment has improved for mergers and acquisitions, as we’ve seen already this year, we gotta have some excellent forecast. I like these stocks and they’re well off their highs with very low price-to-earnings multiples. Could it be a real opportunity? I think so. We’ve been buying a bunch of them for the Charitable Trust because a robust economy often produces the best results for these companies. Regardless of the bond market or the Fed. We have less, fewer credit problems.”

Goldman Sachs (NYSE:GS) is a prominent global financial services firm, recognized for its expertise in investment banking, wealth management, and other financial services. As of the end of the third quarter of 2024, the company reported deposits totaling $445 billion. In the first half of 2024, it achieved a margin of 23%. For the full year, the company expects its fundraising efforts to surpass $60 billion, driven by ongoing demand across various asset classes.

The company is also on track to meet its $10 billion target for management and other fees in 2024. In the third quarter of 2024, its Global Banking and Markets division remained a top advisor in mergers and acquisitions (M&A) and a key player in global risk management. As demand for committed acquisition financing has increased, the company anticipates this trend to continue with the rising volume of M&A activity.

According to Stephan Feldgoise and Mark Sorrell, co-heads of Goldman Sachs’ (NYSE:GS) Global Mergers and Acquisitions, several factors have contributed to a surge in M&A activity in 2024. Despite market volatility stemming from global elections, M&A activity rose by approximately 10% and is expected to see similar growth in 2025. Private equity firms are deploying capital at rates closer to historical averages, and Goldman Sachs remains confident about the long-term prospects for M&A, regardless of geopolitical or regulatory challenges.

2. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 105

A slew of banks, including JPMorgan Chase & Co. (NYSE:JPM), will report earnings on Wednesday and Cramer commented:

“On Wednesday, we’re gonna hear from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup. I think they’re all gonna be pretty darn good. Plus, given the environment has improved for mergers and acquisitions, as we’ve seen already this year, we gotta have some excellent forecast. I like these stocks and they’re well off their highs with very low price-to-earnings multiples. Could it be a real opportunity? I think so. We’ve been buying a bunch of them for the Charitable Trust because a robust economy often produces the best results for these companies. Regardless of the bond market or the Fed. We have less, fewer credit problems.”

JPMorgan (NYSE:JPM) is a global financial services institution that offers a range of services, such as deposits, loans, investment banking, and wealth management. As of the third quarter of 2024, its financial standing reflects a highly stable and resilient balance sheet. The bank reported an impressive total loss-absorbing capacity of $544 billion, complemented by $1.5 trillion in cash and marketable securities.

In comparison, its riskiest assets, including loans, were valued at $1.3 trillion. For the full year 2024, the company forecasts net interest income (NII) excluding markets to be approximately $91.5 billion, with total NII expected to reach around $92.5 billion. Additionally, the bank expects the 2024 net charge-off rate for credit card loans to be about 3.4%.

Additionally, JPMorgan (NYSE:JPM) has a significant presence in Japan, where it is among the largest foreign investment banks. As of December 2024, the company strengthened its position by appointing Satoshi Shimada from Bank of America to lead its mergers and acquisitions team in Tokyo. The move was made to take advantage of the surge in dealmaking activity in the country, driven by government initiatives encouraging companies to enhance shareholder value, a weak yen, and favorable borrowing conditions.

1. KB Home (NYSE:KBH)

Number of Hedge Fund Holders: 27

Talking about KB Home (NYSE:KBH), Cramer said:

“We need to talk about KB Home. This is a home builder with a significant presence in California. When so many houses get burned down, you’d think that it might be good for the home builders, particularly KB Home, but there is a real mismatch here. Many of these homes are very expensive.

That’s not KB’s niche. It makes the kind of homes where higher mortgage rates really hurt sales plus the possibility of a draconian immigration policy for the Trump administration will hurt the home builders in two ways. First, they’re gonna have to pay higher wages and then they’re gonna have fewer customers. So even though KB Homes have put up some consistently good numbers all during this big great period for housing, I fear that this stock could end up on the canvas.”

KB Home (NYSE:KBH) is a homebuilding company that constructs and sells various types of residential homes and provides financial services, including insurance, title services, and mortgage banking. The company announced its fourth quarter and full year 2024 today. It reported notable growth, achieving a 19% increase in revenues and a 36% rise in diluted earnings per share compared to the previous year.

The company’s revenue growth in the fourth quarter was driven by a higher number of deliveries, which were made possible by faster build times. Net orders also saw a significant increase of around 40% year-over-year, reflecting strong buyer demand for homeownership and an improving housing market, despite challenges related to mortgage interest rates.

This positive performance helped KB Home (NYSE:KBH) reach nearly $7.0 billion in total revenues for 2024, with a diluted earnings per share of $8.45. Operationally, the company had a successful year, opening 106 new communities, reducing build times, and achieving the highest level of customer satisfaction in its history.

While we acknowledge the potential of KB Home (NYSE:KBH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KBH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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