Jim Cramer's 'Mad Money' Recap: Takeover Talk Distracts From Earnings Focus

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Friday should have been dominated by corporate earnings results, but instead the talk was about potential M&A deals, Jim Cramer told his "Mad Money" viewers.

And that's exactly what they should be focused on come Monday, Cramer said as he laid out his weekly game plan. 

On Monday, investors should look for any news surrounding AT&T (T) and Time Warner (TWX) , as the former is reportedly interested in buying the latter. They should also look for any news on Qualcomm's (QCOM) desire to purchase NXP Semiconductor (NXPI) . Keep on eye on Kimberly-Clark (KMB) , VF Corp. (VFC) and Visa (V) for earnings too. 

Next week will be a big week for earnings, with Tuesday in the spotlight. Apple (AAPL)  is scheduled to report, and Cramer is optimistic about results. He also thinks 3M (MMM) and Caterpillar (CAT) could deliver good results. It might be too early to expect a rebound in Chipotle (CMG) , while maybe now would be the perfect time for Under Armour (UA) to snap out of its funk. Without organic growth for Procter & Gamble (PG) , it's hard to see the stock moving higher. 

On Wednesday, Boeing (BA)  is scheduled to report, and Cramer still thinks the aerospace cycle isn't done growing. Wait for the conference call before reacting though, he said. Coca-Cola (KO) and Norfolk Southern (NSC) will also report earnings.

Real Money: Cramer says M&A news is just the start.

On Thursday, Alphabet's (GOOGL) results will be out, along with Amazon (AMZN) , for which everyone has high expectations. Conversely, most are negative on Twitter (TWTR) heading toward its earnings report, so let's see if the company can surprise to the upside on any of its metrics. 

On Friday, Exxon Mobil (XOM) and Chevron (CVX) will report. Cramer wants to hear the companies' opinion on the upcoming OPEC deal and projections for oil prices. If the companies plan to increase capital expenditures, that's a positive read-through for a company like Schlumberger (SLB) . 

The bottom line: Don't be too quick to react to headline earnings numbers, Cramer said. Next week will be busy, with a lot of back-and-forth. M&A could dominate the headlines, but investors need to be smart when navigating the moves that could come. 

Look closely to see the differences

Sometimes it can be difficult to interpret why stocks perform differently on earnings results, despite being in the same sector and reporting seemingly similar results. That's why Cramer's looking to help his viewers break down the differences. 

He pointed to Danaher (DHR) and Illinois Tool Works (ITW) . Both companies topped earnings-per-share expectations, reported in-line revenue results and provided slightly higher guidance.

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But Danaher rallied roughly 4% and Illinois Tool Works fell more than 2%. What gives? 

For starters, Danaher's stock price was up just 9% on the year heading into the results. While the gain is good, it's not nearly as high as ITW's more than 20% year-to-date rally. As a result, expectations for Illinois Tool Works were higher than the expectations for Danaher.

When Danaher reported good results, it surpassed expectations, while Illinois Tool Works had a higher hurdle to clear, he explained. 

Adding to that, investors seem to be less enthused about the industrial sector overall, so other stocks like Honeywell (HON) and General Electric (GE) have been paying the price too. 

But remember that Danaher performed a breakup earlier this year, so it has less exposure to this out-of-favor sector, while Illinois Tool Works is still very much a pure-play industrial name. 

The bottom line: Just because two companies in the same sector report similar results, doesn't mean the situation at both companies is the same, Cramer said.

A Bull and a Bear Walk Into a Bar

After opening 6% lower, Boston Beer (SAM) ended Friday 4.3% higher. What an impressive rally, Cramer said, and one that needs some more investigating. 

The company reported earnings of $2.48 per share, below expectations of $2.60 per share, while revenues came in below estimates as well. Shipment volumes fell 12%, gross margins shrank and management cut its full-year earnings guidance. 

So why the rally?

Cramer argued that a short-squeeze likely ignited the stock, as short-sellers were looking to cash in on the decline. Still, this may only be temporary and he's not ready to jump on the bull wagon just yet.

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The bear case argues that Boston Beer continues to lose market share in the craft beer industry, as the number of competitors has boomed in recent years. That helps explain why the company lost its growth momentum and why shares have fallen roughly 40% from its 52-week highs. 

Despite the decline, it's valuation still isn't that attractive, Cramer said, pointing out that the stock trades at 24 times next year's earnings estimates. 

The bottom line: Why pay up for a struggling company like Boston Beer when you can buy a phenomenal company like Constellation Brands (STZ) for approximately the same valuation? "I am siding with the bears" on Boston Beer, Cramer said.

AutoZone getting back on track?

Cramer took a closer look at AutoZone (AZO) , a stock that has a great long-term track record, but appears to have lost its mojo. Shares are up almost 75% over the past three years and 45% over the past two years. But in 2016, the stock has gained less than 2%. So is this stock out of gas or simply pausing to refuel?

The stock has struggled to move higher after the company reported somewhat disappointing earnings results over the past two quarters. While AutoZone does have challenges, it's making adjustments to better the business. 

Consider that AutoZone is putting a larger emphasis on commercial customers, making sure mechanics have the parts they need. It's also turning some of its stores into "mega hubs," Cramer said, explaining that these locations act as distribution centers for smaller, nearby locations. 

AutoZone still sports a very impressive buyback, one that Cramer has considered one of the best in the stock market over the past few years.

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Despite the somewhat lackluster recent results, AutoZone is still kicking out strong earnings growth. Can you imagine the kinds of results it will have when times are actually good?, he asked. 

The bottom line: "Yes, I still like AutoZone the company," Cramer said, "and AutoZone the stock is inexpensive." It also sports the lowest valuation among its peers, despite having some of the best growth and management.  He is still a long-term believer in the stock, regardless of the company's short-term performance.

Lightning Round

In the Lightning Round, Cramer was bullish on Marriott (MAR) , Expedia (EXPE) and Verizon (VZ) .

He was bearish on Celgene (CELG) , Starwood Hotels & Resorts (HOT) , Frontier Communications (FTR) and LG Homes (LGIH) . 

No Huddle Offense

For the show's "No Huddle Offense," Cramer wanted to recap Friday's session, which had an unbelievable amount of news. 

British American Tobacco (BTI)  wants to buy the rest of Reynolds America (RAI) for $47 billion. If you missed the move in Reynolds, it's best to just move on now, Cramer suggested. 

Qualcomm is reportedly offering $110 per share for NXP Semiconductor. The deal feels a little disappointing for NXP shareholders, which is also a holding in the Action Alerts PLUS portfolio.

With a potential AT&T-Time Warner deal set for next week, it puts an "M&A bid" in the market, Cramer said, which is much easier to bet with, rather than against. 

As for earnings, Microsoft (MSFT) reported impressive results and CEO Satya Nadella is delivering in the cloud. "The man is continually underestimated," Cramer reasoned, "but not by me."

Another chief exec that's underestimated? How about McDonald's (MCD) CEO Steve Easterbrook. This company still has a lot more innovation up its sleeve and it would be wrong to sell the stock, Cramer said. 

Earnings from General Electric weren't a disaster, but they weren't anything to cheer about either. If it weren't for that juicy dividend yield, the stock would likely be headed lower. 

Verizon is suffering from price-aggressive competitors, like Sprint (S) and T-Mobile (TMUS) , while investors got too excited about Union Pacific (UNP) , Cramer said. The turn hasn't come yet for this railroad operator. 

Finally, Alkermes (ALKS)  shares rose almost 28%, thanks to positive news surrounding its lead drug. While profit-taking will ensue at some point, this one doesn't seem done going higher, he said. 

Although this week seemed busy, just wait until next week gets underway, Cramer concluded. 

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

At the time of publication, Cramer's Action Alerts PLUS had a position in NXPI, V, AAPL, GOOGL, GE and SLB.

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