CNBC’s Jim Cramer on Wednesday broke down his 2022 outlook for last year’s worst-performing stocks in the Dow Jones Industrial.
The “Mad Money” host also gave his forecast for the blue-chip index’s best performers.
“There are a few comeback stories in the dogs of the Dow, but for the most part I don’t expect these dogs to have their day in 2022,” Cramer said.
Walt Disney shares fell 15% last year, which Cramer said was not a fun experience because his charitable investment trust owns the stock. However, Cramer said he believes the media and entertainment giant will start to get more credit for its “perfect balance of at-home, at-theater and on-vacation assets” once the Covid pandemic calms down.
“These phone and cable companies are basically competitive utilities,” Cramer said, describing that as a “terrible place to be.”
“I don’t know how Verizon can become something else. At the moment, it’s pretty much a higher yielding bond … but the stock went down 12% last year so the offset of the yield didn’t help.”
A pilot waves as a Boeing 777X airplane taxis during its first test flight from the company’s plant in Everett, Washington, U.S. January 25, 2020.
Terray Sylvester | Reuters
It’s been a tough few years for Boeing, Cramer said, but he noted that his charitable trust still owns the stock. Allegiant Air’s decision to purchase 50 new Boeing 737 Max planes could be a “harbinger for a reversal of fortune” for Boeing, Cramer said.
Cramer criticized Amgen’s recent performance and its future outlook, calling the drugmaker’s stock “a dug.” He added, “I thought Amgen was supposed to be a growth company, but as biotech’s go, it’s a fossil.”
Honeywell, which fell 2% in 2021, is one of Cramer’s top stock picks for 2022. He said Wednesday he believes in the industrial conglomerate’s management team, but attributed a large amount of the stock’s challenges to the company’s aerospace unit.
Cramer called Merck’s recent stock performance “extremely disappointing.” While the stock rose 2.43% Wednesday, Cramer said he’s not sure “what can sustain the rally” and suggested investors sell shares.
A pedestrian wearing a protective mask walks past Visa Inc. headquarters in Foster City, California.
David Paul Morris | Bloomberg | Getty Images
While Visa shares have lagged the broader Dow over the past year, Cramer said that historically, it’s “often the prelude … for a very big move.”
Smaller companies that have been trying to take share in the payments processing space has been a headwind for Visa shares, along with rival Mastercard, Cramer said. Out of the two, Cramer said he prefers Mastercard for its growth.
Walmart shares have struggled over the past year, and Cramer said he’s rethinking his charitable trust’s ownership of the retail behemoth.
“If they can’t get more users of their [membership program, Walmart+],” Cramer said he may use future strength to sell the stock “because there are plenty of more consistent retailers.”
Michael Roman, CEO, 3M
Scott Mlyn | CNBC
Industrial giant 3M had “a tough year and yet it still finished in the black, despite several guide downs based on several different divisions — uncharacteristic for this great company,” Cramer said. “The stock doesn’t seem to want to go much lower here, but I can’t think of anything that could turn it around,” he added.
“I like this one. I believe in management, too,” Cramer said. “However, I don’t like where we are in the chemicals cycle — they’ve almost all hit peaks. … Bad stock to own when the Fed starts tightening. There are better fish to fry.”
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