Jim Cramer is urging caution on Eaton Corporation plc after the stock’s sharp climb ahead of the company’s upcoming earnings report. On the March 12 episode of Mad Money, he told a caller, “It’s had a big run,” and added, “The ones that have had big runs, they tend to sell off.”
Cramer said he would not rush in blindly, telling viewers, “I gotta be careful.” He also said, “I do want to own Eaton,” but flagged the possibility of weakness as traders position for the report. Eaton is a power management company that makes electrical, aerospace and vehicle components, including power distribution equipment, circuit protection devices and specialized systems for aircraft refueling, engine valves and electronic controls.
The company’s business reaches into data centers as well, where it provides electric hookups and air conditioners to keep them cool. That gives Eaton a role in one of the market’s more durable growth areas, but it also helps explain why the stock has already run hard since its inception in May 2014. When a stock has moved that far that fast, Cramer said, the market often gets less forgiving.
He tied that caution to the mood around stocks more broadly, saying, “Well, you know, it’s funny if it were, you know, this is a silly asterisk if it were not for the war, but I think because of the war, it’s going to make everyone feel a little bit dicier about owning stocks.” He then summed up the trading pressure in one line: “So you have people selling it.”
That leaves Eaton in a familiar spot before earnings: a company with a business many investors want to own, but a stock that may already have pulled forward too much of the good news. The next move will hinge on whether the company’s results can justify the run or whether sellers take the lead first.