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NEW YORK (TheStreet) -- Is the market too expensive? Should investors be worried? Those were some of he questions Jim Cramer pondered with his Mad Money viewers Monday. The average stock in the S&P 500 is now trading at 18.5 times earnings, which is higher than historical norms. But what, exactly, is "normal" anyway?

The stock market was trading at an average 29 times earnings just before the crash in 1987. Back in the dot com bubble of 2000, the highest of high fliers were trading at 80 and 90 times earnings. Conversely, during times of strong inflation, the market has traded around 12 or 13 times earnings.

When it comes to valuations, it's all relative. Given that stocks have no competition from bonds at the moment, its slightly inflated prices make perfect sense. And rather than looking at "the market," Cramer suggested looking at individual stocks. Is Apple (AAPL - Get Report) expensive at 14 times earnings with the biggest stock buyback on Earth and a dividend that rivals the five-year treasury? Apple trades at just 12 times earnings when you back out its cash, and that's why Cramer owns Apple for his charitable trust, Action Alerts PLUS.

Gilead Sciences (GILD - Get Report) has a cure for hepatitis-C, along with a strong balance sheet, a terrific pipeline and plenty of growth, yet it trades at a ridiculous 10 times earnings.

Then there are banks. Wells Fargo (WFC - Get Report), another Action Alerts PLUS name, 13 times earnings, while both JPMorgan Chase (JPM - Get Report) and Goldman Sachs (GS - Get Report) are valued at just 10 times earnings.

Yesterday, Altera (ALTR - Get Report) seemed expensive at 25 times earnings, then Intel (INTC - Get Report) offered up $54 a share for the company, valuing it at 40 times earnings.

Overall, Cramer thinks the markets are fairly valued, with undervalued areas, some areas in flux, and yes, a few that are indeed, worrisome.

Executive Decision: Manny Chirico

For his "Executive Decision" segment, Cramer checked in with Manny Chirico, chairman and CEO of apparel giant PVH (PVH - Get Report), which today released strong earnings with raised guidance and a stock buyback program.

Chirico was more upbeat than he's been in recent months, saying his company's investments in Calvin Klein are just now starting to pay off. He was bullish on PVH's prospects in Europe, which is starting to see both sales increases and a boost in gross margins.

Other bright spots for Chirico include denim, a category that is also starting to see sales improvements, with Calvin Klein denim particularly strong. Chirico was also upbeat about sales at both Macy's (M - Get Report) and Kohl's (KSS - Get Report) here in the U.S.

Finally, Chirico noted that as an international company, currency pressures are masking his company's true potential, which he noted would be seeing double-digit earnings growth if not for currency issues.

Must Read: 5 Big Dividend Stocks That Want to Pay You More in 2015

Executive Decision: Brian Cornell

In his second "Executive Decision" segment, Cramer sat down with Brian Cornell, chairman and CEO of Target (TGT - Get Report), a stock that's up 36% since Cornell took the helm just 10 months ago. Today Target posted a 7-cents-a-share earnings beat on a 2.3% increase in same-store sales.

Cornell said that Target's focus is once again back on style, strengthening its core areas of apparel, home, beauty, baby and kids. Target is bringing excitement and innovation back to these categories with more collaborations with award-winning designers.

Target is also hard at work understanding core customers and meeting today's key trends. Today's consumer is digital savvy, Cornell noted, which is why Target continues to invest in online sales, which account for 38% of the company's business, as well as omni-channel operations.

Target is following the natural and organic food trend, adding more healthily items with cleaner labels, while still carrying the old favorites. Target hasn't forgotten college students either, and is opening Target Express locations next to colleges to help cater to that segment.

Finally, when asked about accepting Apple Pay, Cornell said Apple's new payment system is a priority, and Target does accept Apple Pay online. But the stores will not see Apple Pay until after "chip and pin" terminals are available at all Target locations.

Buy Walgreens

The health care cost containment companies are about to come into vogue in the Wall Street fashion show, Cramer told viewers, and that means Walgreens Boots Alliance (WBA - Get Report), an Action Alerts PLUS holding, is a stock that should be in your portfolio.

With the world's economy slowing, investors need to be picking stocks that work in a slowing environment. Many investors may think of Walgreens as just a drugstore chain, but after its acquisition of Boots Alliance last year, the company is now a titan of prescription drug buying, one that can easily negotiate lower prices from drugmakers.

Cramer expects Walgreens to have many more strong quarters to come, as the company is accelerating its same-store sales and has lots of room to improve its profitability. And don't forget about the possibility of another merger, Cramer noted, as Walgreens already has a 5% stake in AmerisourceBergen (ABC - Get Report).

For all these reasons, Cramer said this $86 stock is heading to $105.

Lightning Round

In the Lightning Round, Cramer was bullish on General Dynamics (GD - Get Report) and Waste Management (WM - Get Report).

Cramer was bearish on JC Penney (JCP - Get Report), Sprouts Farmers Market (SFM - Get Report) and United Continental Holdings (UAL - Get Report).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer answered the question of what to do when a stock you own posts a perfect quarter, but the stock falls anyway? If that stock is Ulta Salon Cosmetics and Fragrances  (ULTA - Get Report), you buy, buy, buy more.

Ulta delivered spectacular results, Cramer told viewers, with an 11.4% rise in same-store sales and $1.04 per share in earnings when the analysts were only expecting 93 cents. Better still, Ulta achieved these strong results by increasing the number of customers at its stores and getting them to spend more through their very popular loyalty program.

So what was it that sent shares plummeting? Best Cramer could tell it was the company's conservative same-store sales guidance of 7% to 9%.

Given that Ulta is only in the early innings of its growth and could easily double in size, Cramer said this is a classic case of a broken stock and not a broken company. He urged viewers to view the decline to buy, buy, buy.

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, TGT, WBZ and WFC.