Stock Market Today: Buy Johnson & Johnson When It Drops

Jim Cramer's top analyst Jeff Marks discusses the latest stock market news including Honeywell's earnings, Johnson & Johnson's vaccine and oil stocks.
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Stocks declined sharply Friday due to concerns in the market stability. The continued trading frenzy motivated by investors part of a Reddit message board called WallStreetBets continued Friday.

TheStreet's Katherine Ross and Jeff Marks discussed breaking news in the stock market. Marks spoke about Honeywell's earnings, Johnson & Johnson's efficacy rate for its covid vaccine under trial and what to look for while investing in oil majors.

Honeywell: Buy Or Sell?

Honeywell  (HON) - Get Report reported fourth-quarter adjusted earnings and sales Friday that beat analysts’ forecasts. On an adjusted basis, the company earned $2.07 a share, above the $2 a share expected by analysts polled by FactSet.

Sales dropped 6% to $8.9 billion from $9.5 billion in the year-ago period but were above analysts’ forecasts of $8.4 billion.

Marks said Honeywell has had a good quarter with both top and bottom-line beat driven by better-than-expected revenue from its aerospace business and strength in their safety and productivity solutions. "Aero is going to be their biggest and that's the one you want to watch for when travel rebounds. The SPS segment is also fast-growing driven by warehouse automation which is a play on e-commerce and string demand for PPE."

Johnson & Johnson: Buy Or Sell?

Health-care giant Johnson & Johnson  (JNJ) - Get Report said Friday that its developing coronavirus vaccine has a 72% efficacy rate in U.S. trials, a lower-than-expected result that sent its shares lower.

Its one-shot vaccine, which does not require storage at extremely low temperatures, provided a 66% protection rate for patients suffering moderate to severe forms of the coronavirus following a large-scale global trial.

Marks said people were hoping to see an efficacy number that rivaled Moderna  (MRNA) - Get Report or Pfizer  (PFE) - Get Report. "In the grander scheme of things, I think the data is good enough especially when we need to get vaccines to as many people as possible and as soon as possible."

For the stock, Marks said to let it shake out a little bit because there were some people buying thinking that this will be an absolute knockout one-dose vaccine. "I would use the weakness as a buying opportunity because JNJ's fundamentals hold."

Oil Stocks

Oil major Chevron  (CVX) - Get Report on Friday posted a surprise fourth-quarter loss of $665 million and missed analysts' estimates. Revenue fell 31% to $25.2 billion from $36.3 billion.

Marks said if investors wish to look at the oil sector they should pick stocks that can lower their break-even costs so they are profitable even if the price of commodities does fall. "Pick the ones that have the cash flow to pay the dividends and support the balance sheet."

He added that oil remains a tough sector because it will face significant headwinds over the next 5-10 years with regards to ESG investing.

Honeywell is a key holding in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells any stock? Learn more from Cramer and his membership team now.