Cramer's Morning Take: Capital One 6/2/25

SPEAKER_1 (0:01)

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SPEAKER_2 (0:31)

Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now, it pays to Discover. Learn more at discover.com/creditcardbased on the February, 2024 Nelson Report.

Jim Cramer (1:01)

Hey, it's Cramer, and this is my Morning Take on the market from today's CNBC Investing Club Morning Meeting. Now, let's go to something that I find... That's nice. That's a nice move. Let's go to something that I find is actionable in our portfolio that I do not get, and the action is capital one. Now I know the banks are down. This time it's Goldman's conviction list. When I worked at Goldman, I would have picked up the phone and told everybody, you must be in this stock. Because there are things that are going to happen with capital one that have nothing to do with the stock market, that are intrinsic and excellent.

Jeff Marks (1:34)

Yeah, certainly there's a catalyst here, that being the Discover deal that recently closed Goldman Sachs. They have a 242 price target on it. Nothing completely new from what we've been saying, and that is the Discover deal has a potential to drive substantial earnings accretion and unlock a multi-year capital return strategy. We've been pointing out you might be able to see that pick up and buy back start in the second half of this year. Think closer maybe to the fall after CCAR. We've got to get through this CCAR stress test this summer.

Jim Cramer (2:05)

This is a bank that has historically had some spike in delinquencies when you go to discuss it. It hasn't.

Jeff Marks (2:12)

No, it's been good. The credit policy has been good. Yeah, absolutely.

Jim Cramer (2:15)

And now it's going to have this closed loop system. It might be able to be something that merchants might want to be able to use their card. It's 2% rather than 3% for AMX. Let's see what happens. But the idea that this combination has made this stock language is foolish. I'd be a huge buyer of this thing. Huge if I had a lot of capital.

Jeff Marks (2:33)

So we also had ASCO, it was a big healthcare meeting. And there is this deal between Bristol Myers and BioNTech. The two companies entered a partnership to co-develop and co-commercialize the next generation cancer drug that is currently being evaluated in phase three trials. They think the drug has the potential to establish a new standard of care across multiple tumor types. Bristol Myers paying BioNTech 1.5 billion up front. But the total deal could be worth 11.1 billion.

Jim Cramer (3:01)

And that's not reflected in Bristol Myers' stock today. I mean, the idea is that Abdevo, plus this, could be better than what we have from Merck with Key Truda.

The action says that's wrong, but the action can often be wrong. What we're hearing from Chris Burner momentarily, he'll be on CNBC. I think he's going to be aghast that his stock wasn't up very big today. Aghast. He thought that this was going to be very important.

Jeff Marks (3:28)

Yeah. I mean, look, at the same time, we've been saying we haven't been buying back any of that stock. After a little bit of stock we sold in the low 60s, only because just disappointment around Cobemfi, right, that latest trial, not statistically significant as an adjunctive treatment in schizophrenia, just been holding off, because it's turned into a show me story.

Jim Cramer (3:48)

Yes, it has. And we certainly need to see better results. The numbers don't seem to be showing so far. Start your day with my out look on the market every morning. Visit cnbc.com/morningtake to become a CNBC Investing Club member at a special rate today.

SPEAKER_5 (4:06)

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