Most investors treat tariff headlines like weather reports, something to grumble about and then ignore. On the other hand, Jim Cramer has never been shy about pounding the table when he smells a bargain and has his eye on two tariff-hit stocks. His logic is that if a good business is knocked down for a macro reason that does not touch its fundamentals, it’s worth buying.
Cramer “loves turnaround stories,” but believes “good turnarounds take time.”
Cramer believes both tariff-hit stocks were mismanaged by their previous CEOs and were rightfully sold by the market. Nevertheless, they may now be oversold, on course for a multi-year turnaround that can bring juicy returns for those who decide to take the leap.
Better yet, both pay 2-3% in dividends while you wait for a recovery.
Let’s take a look.
Starbucks (SBUX)
Last week, Cramer met with CEO Brian Niccol from Starbucks (NASDAQ:SBUX). He pointed out that he turned around Chipotle (NYSE:CMG), which excited the market. SBUX stock then went from trading in $70s range to $117.
“The analysts did nothing to discourage them,” Cramer said.
He believes the Starbucks turnaround will take time, saying that even the CEO “emphasized endlessly” that the stock won’t snap back in short order.
However, Cramer is not bearish here. SBUX stock is back at $85 after investors were disappointed by a slower-than-expected turnaround, and this is where Cramer sees the opportunity. Per Cramer, “Some analysts now blame the stock’s latest downturn on the slowness of the turn itself. I blame the decline on the lack of recognition from the analyst community…”
He added that Brian “wasn’t under-promising in order to overdeliver. Starbucks was in no shape to promise anything because the entire organization had been a wreck. Now, at last, I think Brian has his arms around what’s been going wrong.”
Cramer finished his analysis on Starbucks by saying “…it is time to buy Starbucks, not to sell it.”
Starbucks is looking at an EPS decline of almost 35% for fiscal 2025, with a 21% recovery in fiscal 2026. As for revenue, analysts think it is only slated to grow 2.2% in FY 2025 and 4.73% the next. This is a meticulous and slow acceleration you’d have to ride through, and I’d agree with Cramer that it’ll be rewarding in the end. You shouldn’t give up on household names.
Nike (NKE)
Nike (NYSE:NKE) has tumbled much deeper than SBUX stock, and presumably carries more long-term upside due to this deep discount. Cramer sees the “same deal” here as SBUX.
He said, “The previous CEO took a good company and turned it into and also ran [sic],” elaborating that “the business didn’t need to be turned around!”
Cramer thinks that the “old hand” CEO Elliott Hill, who took charge of the company in October of last year, needs to now “reinvent the entire business.”
“He has to fix China, not a quick fix… There’s still inventory within the system, and that holds down earnings.” Cramer thinks that analysts “have realized that a fast turnaround is impossible,” which is the reason the stock is pulling back.
But like with Starbucks, he’s not at all bearish. Cramer stated, “They don’t seem to understand that turnarounds do take a lot of time. This is precisely the moment when people want to give up on Starbucks and on Nike, which is why I want to be a buyer, not a seller. Buy buy buy!”
I believe Cramer is right about buying the dip on NKE stock, too. Most of the tariff news has been priced in here, and things are looking up. We’re looking at a 23.5% EPS trim in FY 2026 before a 51% recovery in FY 2027. Sales growth is expected to grow by 1% in FY 2026 and then hold at around 5%.
If the EPS grows in line with estimates, Nike could indeed pull off a sharp recovery within 2-3 years.
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