Cramer's Morning Take: Johnson & Johnson 4/18/23

Jim Cramer (0:02)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting. Well, I'm going to break form here. Right now, I have to tell you, I think J&J is wrong to be down. We can talk about the market, but I think that we've gone over, and we've had, this is a company that we have very close relationship with, and I'll say only like that, but it is true, Jeff, that there are people who are selling the stock and they don't know what they're doing.

Jeff Marks (0:25)

And it looked pretty good this morning, I mean, as it should have, right? You had a strong earnings beat, revenue beat, they raised their outlook for the full year. I have beats pretty much across the board. I know vaccine sales might have been one of the drivers, but still very strong numbers in pharma, in medtech with China coming back, and in consumer, the growth. Now, on the conference call, there was a comment made. I think this explains perhaps why the stock is down. I don't think it's right that it should be, but they talked about, so they've had this $60 billion revenue target for 2025 for the pharma business. The street doesn't believe they'll do $60 billion. The street is at around $54 billion.

Jim Cramer (1:03)

So the street doesn't believe J&J's projections. Correct.

Which are $60 billion.

Jeff Marks (1:09)

$60 billion.

Jim Cramer (1:10)

And the street's dramatically lower from that.

Jeff Marks (1:13)

$54 billion.

Jim Cramer (1:14)

Right.

Jeff Marks (1:14)

Now, the company did say on the call that based on current rates, exchange rates, that number is actually going to be $57 billion.

So my interpretation of that, there might be some confusion happening. Well, if the street's at $54 versus $60 billion, but you're lowering it by $3 billion due to FX, maybe it should be lower.

Jim Cramer (1:36)

So the street thinks that they'll only do $51 billion?

Jeff Marks (1:39)

Yeah, I don't know. I mean, that would be the Apple's-Apple's comparison, but I don't think that's fair at all.

Jim Cramer (1:45)

I think when you see this, I mean, I was just talking to myself initially. You shat about it.

Jeff Marks (1:49)

Pre-call.

Jim Cramer (1:49)

Pre-call. First you hear, all right, well, maybe because they were going to make money in the COVID vaccine and now they're not. No, everyone knew they weren't. That was already disclosed.

Jeff Marks (1:58)

It wasn't in their guidance.

Jim Cramer (1:59)

Then you have people worried about maybe they said something new on TAO. No, there was absolutely nothing about TAO. They disclosed the litigation, which is what they've had to do.

Jeff Marks (2:07)

And they think they'll get the supermajority.

Jim Cramer (2:10)

And that's done in May. So checkbox, no. So then you start thinking, well, did they lower guidance on pharma? Well, they did not lower guidance on pharma. Were they conservative about MedTech? Absolutely, because they didn't even talk about how the China inflection is coming right now. Was consumer products not so good? No, consumer products was actually double digit. They were able to raise price and no degradation of market share, which then all comes down to the fact that I think that this stock, which is down $4 or $5, may not rally in a given day because there's someone out there who really hates it right now. But it is a buy.

Start your day with my out book on the market every morning.

Visit cnbc.com/morningtake to become a CNBC Investing Club member at a special rate today.

SPEAKER_3 (2:57)

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.