November 27, 2022

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Jim Kramer says the market could hit an 'investable' bottom after analysts cut earnings estimates

Jim Kramer says the market could hit an ‘investable’ bottom after analysts cut earnings estimates

CNBC’s Jim Kramer said Thursday that a possible upcoming series of estimated earnings cuts from analysts could create selling and an opportunity for investors to make some buying.

“Over the next few weeks, before earnings season kicks in, I expect analysts to hit us with some proactive cuts in estimates as more companies hit us with negative advance announcements,” he said.

“That would be bad for the averages, but once the sell-off occurs and we get past the estimated cuts for 2022 and 2023, that’s it. Then we won’t have a tradeable bottom like this, but an investable bottom,” he added.

The “money madThe host’s comments come after a turbulent earnings season hit by inflation, which has left companies short of Wall Street expectations.

Cramer said he thinks analyst consensus earnings estimates for stocks in the S&P 500 are too high, and they should come down because markets don’t hit rock bottom unless bad news is published in stock prices.

“They expect 8% growth, followed by 11% next year. I find it hard to believe. Eight to eleven percent earnings growth is basically what you would expect in an average year,” he said.

He noted that there have been several companies in recent weeks that have reported good but disappointing results.

“You’ve had these really great quarters, but they say things are getting weaker. People love them because they think the discretionary cuts are finally over. I’m not sure,” he said.

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