Why this health-care stock isn’t bouncing after preannouncing beat
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. The S&P 500 rose in afternoon trading as investors shrugged off news of the Justice Department’s investigation into Federal Reserve Chairman Jerome Powell. The investigation is related to the $2.5 billion renovation of the Fed headquarters and Powell’s testimony about it. But Powell said the investigation was the result of the Fed setting interest rates based on what it considers best to serve the public, rather than following President Donald Trump’s preferences. The ongoing conflict raises questions about the future of the Fed’s independence, but the market has put the risks aside for now. Monday’s market laggards were financial statements, which took a hit after Trump called for capping credit card interest rates at 10%. In a post on Truth Social on Friday, Trump said the cap would go into effect on January 20 but did not provide further details on how it would be implemented. Capital One, one of the nation’s largest credit card issuers, fell more than 7% on the news. Another Club stock, Wells Fargo, lost almost 2% of its value. Meanwhile, Alphabet’s market value exceeded $4 trillion for the first time. Google’s parent company hit an all-time high after Apple used its AI model Gemini to power the iPhone maker’s AI features. We see this as a big win for investors of both tech giants. Danaher pre-announced better-than-expected results ahead of its Tuesday presentation at JPMorgan’s annual healthcare conference in San Francisco, which is always packed with trial data, new partnerships, deals and business updates. The medical equipment supplier said it expects fourth-quarter non-GAAP underlying revenue to be toward the upper end of its low-single-digit growth target, and full-year 2025 non-GAAP adjusted earnings per share to be toward the upper end of its previously announced guidance range of $7.70 to $7.80. Both numbers look slightly better than FactSet’s consensus for core revenue growth of about 1.4% and earnings of $7.71 per share. Danaher’s shares did not react positively to the news; It was down about 1% on Monday. Our sense is that optimistic results are largely expected given management’s “under-promise, over-deliver” nature. Investors are instead eagerly awaiting comments on 2026, and there wasn’t much new this morning. Management backed its preliminary expectations of a 3% to 6% increase in core revenues and high-single-digit earnings growth. We’ll be listening at tomorrow’s presentation to get more color on the current year, but formal guidance is unlikely until the company reports earnings on January 28. Buy Club holds Nike, Jefferies analysts tell the weekly ICR consumer conference weekly, arguing the retailer is on track to become a “dividend aristocrat” by 2026. To earn this title, a company must be a member of the S&P 500 and have increased its dividend for at least 25 consecutive years. This is a milestone that proves that a firm’s cash flows are resilient across economic cycles. “Achieving Aristocrat status will put NKE on more investors’ screens, although shares are still trading near 15-year lows.” [Price to Sale] Even though North America is improving, wholesale rebuilding is taking place and Running is posting strong earnings, Jefferies wrote in a note on Sunday. Nike last increased its quarterly dividend in November, so it still has about 10 months before it goes aristocrat. That said, we appreciate Jefferies putting it on our radar. The next level up from a dividend aristocrat is the more exclusive “dividend king club.” To become a member, a company must have increased its dividend payment for at least 50 consecutive years. Procter & Gamble and Dover are the only stocks in the Charitable Trust with this label. Next up: There are no significant earnings on Tuesday, marking the unofficial start of fourth-quarter earnings season, and it will be interesting to hear from JPMorgan, Delta and Bank of New York Mellon their thoughts on the viability of the President’s proposed credit card interest rates. The range will be the Consumer Price Index (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) By subscribing to the CNBC Investment Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a transaction alert before buying or selling a stock in his charitable foundation’s portfolio. THE ABOVE INVESTMENT CLUB INFORMATION SHALL HAVE NO LIABILITY OR DUTY RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT GUARANTEE IS MADE.
