Cramer's Morning Take: Eaton 4/8/24

Jim Cramer (0:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting. We've got a calm morning where it looks like everything but our favorites in tech is holding in. Some of that is oil is coming down. I think that the idea that you can base oil on troops being pulled out of Southern Gaza and Israel is wrong, but there is a war premium.

And I come back and I say, let's stop being focused on the short-term rates and the short-term Israel and the short-term oil and focus on what is about to come, which is earnings, and the industrials are going to lead us.

Jeff Marks (0:38)

Yeah, that was the crux of your story that you put out yesterday. Block out the short-term noise.

Jim Cramer (0:43)

Was it two fishes? Was it two or what, do you think it was tempered?

Jeff Marks (0:47)

No, I don't think it was two fishes, only because, right, I forgot the number, but there was like a record number of Fed speakers last week, which is just crazy because it's...

Jim Cramer (0:57)

Right, and I just think that what we should be looking at is if they're knocking down stocks, go scoop up Eaton. We've been waiting for Eaton to come in. There was a clown downgrade of Eaton.

Jeff Marks (1:06)

Yeah, a downgrade today by Wolfe, they go to underperform from peer performance, so they haven't liked it. A valuation call...

Jim Cramer (1:11)

I don't mean to call them a clown. I mean to call them a sad clown.

Jeff Marks (1:15)

Well, they've been peer performed, so maybe that is... So they point out there's been a wave of upgrades from long-standing bears folding their cards. They're not going to do that, so at least they are kind of holding their ground, so to speak, pointing to a big premium valuation relative to the group.

But I guess the question is that maybe it's trading at such a high premium because a big earnings beat is coming.

Jim Cramer (1:36)

This is a tech stock.

Jeff Marks (1:37)

And it'll look a little bit cheaper.

Jim Cramer (1:39)

If we believe that the data centers are going to increase, this is a tech stock. The biggest amount of things that are ancillary to the data center made by Eaton.

Jeff Marks (1:50)

Right, that's one of their largest end markets. Somewhere at 10% to 15% of sales. Obviously, we know the data center market is growing fast just based off all the activity, all the spending happening from the MegaCaps, Amazon, Microsoft. You pointed all these out yesterday in the story. So, I mean, look, the stock is all time high on Friday.

Right, Craig's retiring, everyone knows there's a CEO transition happening. At some point, he hasn't announced his plans, but there's an age requirement, so he's almost there.

Jim Cramer (2:24)

It's kind of the way it works in corporate America. Start your day with my outlook on the market every morning. Visit cnbc.com/morningtake to become a CNBC Investing Club member at a special rate today.

SPEAKER_3 (2:39)

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 forward slash investing club disclaimer.