CNBC’s Jim Cramer said on Thursday that a possible next drop in earnings estimates from analysts could create a sell-off and an opportunity for investors to buy.
“Over the coming weeks, before earnings season begins, I expect analysts to hit us with preemptive estimate cuts as more companies hit us with negative advance announcements,” he said. he declared.
“It’s going to be bad for the averages, but once the sell-off hits and we get past the estimate cuts for 2022 and 2023, that’s it. That’s when we won’t have a tradable bottom. like this, but an investable fund,” he added.
The ‘Mad Money’ host’s comments come after a turbulent earnings season marred by inflation as companies failed to meet Wall Street expectations.
Cramer said he thinks analysts’ consensus earnings estimates for S&P 500 stocks are too high and needed to come down as markets don’t crash unless bad news is priced in. shares.
“They’re predicting 8% growth, followed by 11% next year. I find that hard to believe. Earnings growth of 8% to 11% is basically what you would expect in an average year. “, did he declare.
He pointed out that there have been several companies over the past few weeks that have announced excellent quarters but disappointing forecasts.
“You’ve had these really good quarters, but they’re saying things are getting weaker. People like them because they think the estimate cuts are finally over. I’m not sure,” he said. .
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