A sharp rotation beneath the surface of the market has pulled several familiar defensive names well below their recent highs, creating the kind of uneven trading Jim Cramer says long-term investors should not automatically fear. During the July 6 episode of Mad Money, Cramer argued that institutional repositioning can temporarily separate a company’s share price from the strength of its underlying business. In his view, those momentum-driven selloffs can create rare openings to buy high-quality companies at valuations that would not normally be available.
Across his July 6 and July 7 shows, Cramer highlighted Walmart, Johnson & Johnson, and PepsiCo as three stocks where the recent weakness looked more like a potential entry point than evidence of a broken business. The common theme was not simply that each stock had fallen. Cramer’s case rested on durable brands, improving operating trends, reliable cash generation, and company-specific concerns that may be starting to ease. These are still individual stock calls rather than a blanket endorsement of the market, and each comes with risks that investors should weigh carefully.
Walmart: Fuel Fears Fade as the Stock Slides
Cramer’s Walmart argument begins with the size of the pullback. Shares had fallen roughly 18% from their recent peak when he discussed the stock, even as some of the consumer fears that pressured retailers appeared to be cooling. He specifically pointed to worries about elevated gasoline costs squeezing household budgets and forcing shoppers to cut back elsewhere. In his view, the market had punished Walmart just as that concern was becoming less severe, creating what he described as an unusually attractive opportunity in a business that continues to gain customers across income groups.
The latest operating results give that thesis some support. Walmart reported fiscal first-quarter revenue of $177.8 billion, up 7.3% year over year, while global eCommerce sales climbed 26%. Its global advertising business grew 37%, including a 44% increase at Walmart Connect excluding VIZIO, showing that Walmart is becoming more than a low-margin retailer. Management also maintained full-year adjusted earnings guidance of $2.75 to $2.85 per share and had $28.2 billion remaining under its February 2026 repurchase authorization. At about $113.70 on July 10, the stock remained well below its recent high, although its premium valuation means investors are still paying for continued execution.
Johnson & Johnson: A Streamlined Healthcare Giant
Cramer’s Johnson & Johnson call is built around the idea that investors may still be valuing the company as the sprawling healthcare conglomerate it used to be. The consumer-health business is already gone following the Kenvue separation, and Johnson & Johnson plans to separate its orthopaedics operation into a standalone company called DePuy Synthes. That transition should leave the remaining business more concentrated in Innovative Medicine and faster-growing areas of MedTech. Cramer’s view is that the stock was caught in a broader healthcare selloff rather than being punished for a deterioration in the company’s own fundamentals.
Johnson & Johnson’s first-quarter results help explain the optimism. Reported sales rose 9.9% to $24.06 billion, while Innovative Medicine operational sales increased 7.4% and MedTech operational sales rose 4.6%. DARZALEX sales reached $3.96 billion, up 22.5%, TREMFYA remained one of the company’s primary immunology growth drivers, and the cardiovascular business grew 13%. Management raised full-year adjusted earnings guidance to $11.45 to $11.65 per share. The board also increased the quarterly dividend to $1.34, extending the company’s annual dividend-growth streak to 64 years. Shares traded near $256.50 on July 10, making the July 15 earnings report an important test of whether the recent operational strength can continue.
PepsiCo: A Yield Above 4% After Earnings
Cramer originally highlighted PepsiCo before its July 9 earnings report, arguing that the stock’s decline had pushed its dividend yield above 4% and created a reasonable place to begin building a position. The earnings are now available, giving investors a more complete picture of both the opportunity and the risks. PepsiCo reported second-quarter net revenue of $24.18 billion, up 6.4% from the prior year, while organic revenue increased 2.4%. Core earnings per share rose 4% to $2.20, and management reaffirmed its full-year outlook for organic revenue growth of 2% to 4% and core constant-currency EPS growth of 4% to 6%.
The report also showed why the stock has remained under pressure. PepsiCo Foods North America recorded lower net revenue as pricing softened, even though volume and market-share trends improved with the help of affordability initiatives. International operations were stronger, and management said year-to-date global organic volume was growing at its fastest rate since 2022. PepsiCo’s dividend remains a central part of the investment case: the quarterly payout increased to $1.48 in June, marking the company’s 54th consecutive annual increase. At roughly $136.90 on July 10, the shares still offered a yield comfortably above 4%, but the path higher may depend on proving that North American snack volumes can recover without sacrificing margins.
A Selective, Stock-Specific Call
These three names should be viewed as selective, company-specific calls rather than evidence that Cramer has turned broadly bullish on every stock that has declined. Market rotations can create genuine mispricing, but they can also expose businesses whose valuations had moved too far ahead of their fundamentals. Walmart still trades at a premium multiple and must continue delivering strong eCommerce, advertising, and membership growth to justify it. Johnson & Johnson faces product-cycle, legal, regulatory, and execution risks as it reshapes its portfolio. PepsiCo must balance affordability, brand investment, productivity savings, and margin protection while consumer preferences continue to evolve.
That distinction matters for investors who are tempted to treat every pullback as a bargain. A lower price does not automatically mean a stock is cheap, and a famous company is not automatically a safe investment. Cramer’s argument is strongest when the decline is driven primarily by rotation or short-term sentiment while the underlying earnings outlook remains intact. Anyone considering these stocks should compare the current valuation with expected growth, decide how much volatility they can tolerate, and size any position so that a disappointing quarter does not derail the broader portfolio. These are Cramer’s opinions as presented on Mad Money, not guarantees of future returns or personalized investment advice.
The Throughline
The connecting thread across Walmart, Johnson & Johnson, and PepsiCo is defensive quality paired with expanding sources of cash flow. Walmart is using its enormous retail footprint to build higher-margin businesses in advertising, membership, marketplace services, and digital fulfillment. Johnson & Johnson is narrowing its focus around pharmaceuticals and faster-growing medical technologies while continuing to return cash through one of the market’s longest dividend-growth records. PepsiCo combines a global beverage and snack portfolio with a dividend yield above 4%, ongoing productivity efforts, and international growth that is helping offset softer conditions in North America.
That does not mean all three stocks will rebound on the same timetable. Walmart’s premium valuation leaves less room for operational disappointment. Johnson & Johnson’s next earnings report and portfolio separation will shape how investors value the streamlined company. PepsiCo must show that improving volume trends can translate into stronger organic growth and better North American profitability. Cramer’s broader point is that rotations sometimes create temporary gaps between price and business quality. Whether these particular pullbacks become long-term opportunities will depend on earnings execution, cash-flow growth, and management’s ability to turn today’s strategic advantages into measurable shareholder returns.
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