Cramer's week ahead: Fundamentals matter again after Reddit trading frenzy

While the waves on Wall Street caused by Reddit traders appear to have subsided, the advances made in the stock market this week can be attributed to the impact of last week’s speculative trading frenzy, CNBC’s Jim Cramer said Friday.

After the major averages had their best five-day stretch since November, the “Mad Money” host said that last week’s turmoil in large part was the real driver behind this week’s climb.

“Last week the Reddit revolutionaries produced some crazy action, which caused a bunch of important strategists to go downright negative,” Cramer said. “Their newfound negativity allowed us to get back on track because it meant we had lots of bears who could then turn back into bulls as the week went on.”

The S&P 500 finished at another record after climbing for the fourth session in a row. The benchmark index moved 0.39% on Friday to 3,886.83, closing out a week where it gained 4.65%. The Nasdaq Composite advanced 0.57% during the trading day, rallying 6% on the week. The Dow Jones Industrial Average rose 92 points to 31,148.24 for an increase of 0.3%, though the blue-chip average was the only of the major indexes to not finish at a record.

The Dow, which is about 40 points away from its record close, will attempt to eclipse its highs from January in the week ahead.

“I can’t guarantee that this week’s placid run will continue. This was the calm after the thwarted rocketship emoji revolution,” Cramer said. “But, thankfully, it feels like we’re back in the business of trying to make money again by finding the stocks of companies with good fundamentals.”

Cramer gave his game plan for the week ahead of corporate earnings. All earnings projections are based on FactSet estimates:

Take-Two Interactive

• Q3 2021 earnings release: after market; conference call: 4:30 p.m.
• Projected EPS: 96 cents
• Projected revenue: $757 million

“Knowing CEO Strauss Zelnick, I bet we get a nice upside surprise, especially now that we’re starting to get leaks about the next Grand Theft Auto, the biggest franchise in gaming,” Cramer said.

Simon Property Group

• Q4 2020 earnings release: after market; conference call: 5 p.m.
• Projected EPS: $2.21
• Projected revenue: $1.13 billion

“Lately, a bunch of mall-based retailers have been catching upgrades,” he said. “Is the strength real? I can’t wait to find out when we get results from Simon Property Group, the largest mall owner on earth.”

DuPont de Nemours

• Q4 2020 earnings release: 6 a.m.; conference call: 8 a.m.
• Projected EPS: 85 cents
• Projected revenue: $5.15 billion

“I expect great things, which is why I pounded the table on DuPont earlier this week on my monthly ActionAlertsPlus.com conference call,” Cramer said. “DuPont’s a terrific manufacturing amalgam that’s spewing cash.”

Canopy Growth

• Q3 2021 earnings release: before market; conference call: 10 a.m.
• Projected losses per share: 33 cents
• Projected revenue: $149 million

“Lots of excitement here because the Democrats want to decriminalize [marijuana], but Canopy and its cohort actually need full legalization if they’re going to keep going higher,” he said.

Cisco

• Q2 2021 earnings release: after market; conference call: 4:30 p.m.
• Projected EPS: 76 cents
• Projected revenue: $11.93 billion

“Cisco’s gradually been transitioning away from hardware toward more software and I think we’re getting close to the inflection point where the stock should start to get a much higher valuation,” the host said.

Twitter

• Q4 2020 earnings release: after market; conference call: 6 p.m.
• Projected EPS: 29 cents
• Projected revenue: $1.18 billion

“Twitter still has plenty of room to run,” he said.

General Motors

• Q4 2020 earnings release: 7:30 a.m.; conference call: 10 a.m.
• Projected EPS: $1.64
• Projected revenue: $36.19 billion

“I’m expecting an explosion in free cash flow and a commitment to ending the internal combustion engine in a little over a decade,” Cramer said. “I think CEO Mary Barra has done some remarkable things here, creating a battery technology that’s worth the price of the entire company.”

Zynga

• Q4 2020 earnings release: 4:05 a.m.; conference call: 5 p.m.
• Projected EPS: 9 cents
• Projected revenue: $679 million

“The whole video gaming business is on fire and that rising tide is lifting all boats, including Zynga,” the host said.

Coca-Cola

• Q4 2020 earnings release: before market; conference call: 8:30 a.m.
• Projected EPS: 42 cents
• Projected revenue: $8.61 billion

“It’s not often you can get the stock of a terrific company with a 3.5% yield … that’s down in part because so many of its restaurant customers are shut down,” he said. “Once we reopen, that business should come roaring back.”

PayPal

• Investor Day: 11:30 a.m.

“I bet you’ll hear from CEO Dan Schulman at the analyst meeting,” Cramer said. “I recommend buying the stock beforehand if you don’t [own it] already.”

PepsiCo

• Q4 2020 earnings release: 6 a.m.; conference call: 8:15 a.m.
• Projected EPS: $1.45
• Projected revenue: $21.76 billion

“I think they’ll deliver an excellent number because their snack business gives them a lot more consumer exposure than Coca-Cola has,” the host said.

Disney

• Q1 2021 earnings release: after market; conference call: 4:30 p.m.
• Projected losses per share: 33 cents
• Projected revenue: $15.89 billion

“As I’ve said many times to you: Disney is my favorite reopening stock. I’m pounding the table again,” he said. “Meanwhile, their streaming service, Disney+, just won’t quit because it’s an incredible bargain.”

Newell Brands

• Q4 2020 earnings release: before market; conference call: 8:30 a.m.
• Projected EPS: 48 cents
• Projected revenue: $2.61 billion

“There’s been so much Sturm und Drang about this one, mostly because of board challenges and missed quarters,” Cramer said. “Those issues are definitively behind them. I think Newell’s comeback is real and the stock can still be bought.”

Disclosure: Cramer’s charitable trust owns shares of DuPont, Take-Two Interactive, and Disney.

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