Cramer said that though Halliburton posted “fantastic” results, the stock got hit after rival Baker Hughes posted a bad quarter.
“I think you’ve got to use this rare opportunity to buy a best-of-breed stock on weakness, which is exactly what we did for the Charitable Trust,” the “Mad Money” host said.
The company Cramer calls a “best-of-breed colossus” beat Wall Street expectations in its first-quarter earnings on Tuesday. Baker Hughes missed expectations in its latest quarter, which Cramer said dragged down the rest of the industry’s companies, including Halliburton.
Halliburton stock fell 4% on Wednesday.
Here are some of Cramer’s key takeaways from Halliburton’s quarterly results and earnings call.
- The company raised its customer spending forecast. “The one thing that’s worried me here is that, even though the crude price has skyrocketed, domestic oil producers have been very disciplined about putting new money to work. … But the industry can only be so disciplined with oil at over a hundred bucks a barrel,” Cramer said.
- According to HAL, the oil and gas industry now prioritizes investing in shorter-cycle investments. “That is fabulous for Halliburton, because these short-cycle projects are like bread and butter,” he said.
- Cramer believes Halliburton is on track to grow even more in the next couple of years. Cramer’s Investing Club raised its price target for the company to $45, which is around 18.4x earnings expectations for fiscal year 2023.
Disclosure: Cramer’s Charitable Trust owns shares of Halliburton.
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