Cramer's Morning Take: Coterra Energy & Honeywell 1/21/25

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Jim Cramer (1:01)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting.

Jeff Marks (1:09)

We did make a few trades today. Yes, some of them we talked about last week. Finally, we were able to do it. One was a trim of Coterra Energy. It's been a nice win.

Jim Cramer (1:21)

We bought so much here, and it's one of those things we just can't keep buying.

Jeff Marks (1:26)

We did keep buying.

Jim Cramer (1:28)

Not really on my way, frankly.

Jeff Marks (1:30)

With the nice run year to date, it actually was a good battle, flipping from a loss to a gain when it takes those gains. Honeywell, trim some, pretty much I'd argue the breakup announcement largely expected at this point.

Jim Cramer (1:42)

Also, the performance, when we get to the earnings, I think once again, they'll disappoint.

Jeff Marks (1:47)

That's the fear, right?

Jim Cramer (1:48)

Well, they have not been rigorous in the way that they've reported.

Jeff Marks (1:51)

Yeah. The fear is another 2025 outlook below consensus. There's also this idea about spin purgatory, where these breakups could take a year plus worth of time. You might see some investors say after the announcement, sell it, we'll revisit it six, 10 months down the line.

Jim Cramer (2:11)

Look at Comcast. We're being spun off. They don't even have a name yet. It was supposed to be done in one year. I don't see things happening in one year because they're so complicated. Right.

Jeff Marks (2:18)

Exactly. So made some sale there. And then we added to Lilly. Stock got hit last week after a soft Q4 announcement.

Jim Cramer (2:24)

Now, let's talk about Lilly for a second. David Ricks is basically saying, this could be 40 million people in this country. But more important, there's been nothing about China yet, nothing about India. So we've got this number that people are so seizing on, which is the US and what the IRA is going to pay, which by the way wasn't so bad. I was afraid they wouldn't pay at all.

Jeff Marks (2:46)

This is for November 9th.

Jim Cramer (2:47)

And I just think people are underestimating the earnings power of Lilly, and they're trying to deal with the idea that it's a 9 to 12 multiple, because the drug stocks trade so low. I would tell you, Bristol Myers, let's talk about that. We bought some Bristol Myers. I think that the drug companies trade at incredibly low levels. And would Bristol Myers and J&J or Merck merge in this new regime, it would pay for some mergers of that scale.

Jeff Marks (3:14)

Well, you certainly saw multiples contract after the election, really all throughout 24 was a bad year for the health care sector. Bristol Myers being one of the cheaper stocks that call it 8, 9 times earnings.

Jim Cramer (3:26)

And it's PE multiple compression. I know it's 33, 32, but wait till you see the earnings are going to surprise. Start your day with my outlook on the daily market every morning at 10, 20 a.m. Visit cnbc.com/morningtake to access all the benefits of being a CNBC Investing Club member.

SPEAKER_5 (3:49)

All opinions expressed by Jim Cramer on this podcast and in connection with the CNBC Investing Club are solely Cramer's opinions and do not reflect the opinions of CNBC, NBC Universal or their parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet or another medium. No specific outcome or profit is guaranteed in connection with your reliance upon or other use of the content from Cramer. The opinions offered in connection with this podcast and the CNBC Investing Club are not an attempt to induce any particular trading behavior, investment or strategy. You should be aware of the risk of loss in following any strategy or investment discussed in the content from Cramer. To view the full CNBC Investing Club Disclaimer, please visit cnbc.com/investingclubdisclaimer.