U.S. stocks sold off about 3% across the board on Friday, as the latest U.S. inflation data showed continued price growth.
The benchmark S&P 500 index fell 5% last week, led by Financials and Information Technology names. Treasury yields also increased and Fed Funds futures are pricing in another 200 basis points of interest rate increases by the end of the year.
It was reported on Friday that core U.S. consumer prices (CPI) jumped by 6% in May, excluding food and energy. Short-term and five-year inflation expectations also increased with the preliminary Univ. of Michigan consumer sentiment survey.
The Week Ahead
Technology names Adobe (ADBE) and Oracle (ORCL) headline a relatively quiet earnings calendar next week.
On the economic front, the inflation watch continues on Tuesday, with May U.S. Producer Prices (PPI). May retail sales are also due out Wednesday morning.
Later that afternoon, the Federal Reserve is expected to raise interest rates by 50 basis points. Investors will pay attention to the FOMC’s quarterly economic projections to gauge how much longer the rate increase may continue.
One such Healthcare name is worth a closer look and is our Stock of the Week.
Stock of the Week: Bruker (BRKR)
The company makes scientific instruments and medical diagnostic tools.
The stock lost fractionally amongst the broad selling last week. It is showing signs that it has the potential to outperform in the second half of 2022. Here’s why:
Bruker has strong operating momentum, which was on display last month when it posted better-than-expected quarterly results. The company earned $0.49 a share in the first quarter, as revenue increased 7% from a year ago, to $595 million.
Organic sales increased 10.5% in the period, and rising customer orders led management to boost its full-year revenue guidance.
At 29.8x the expected profit over the next four quarters, Bruker is priced at a discount to its peers. Wall Street agrees that the stock holds value. The average price target of five active analysts tracked by TipRanks is $73, reflecting 18.2% upside potential.
In the meantime, the company carries an “Outperform” Smart Score of 10/10 on TipRanks. This data-driven stock score is based on 8 key market factors.
Additionally, the Smart Score indicates insider buying and positive sentiment from hedge funds and financial bloggers.
FYI: This is just 1 of the 20+ stocks selected for the Smart Investor portfolio, a weekly newsletter that blends big data, and market insights.
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