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Weekly Market Review: Market Gains Ahead of Holiday

Story Highlights

Our weekly review of the market. Markets ended a lengthy streak of weekly declines. Our Stock of the Week is a Technology name that gained more than 10% last week and reported 18% year-over-year growth in its last earnings report.

U.S. stocks rallied about 2% across the board on Friday, as markets ended a lengthy streak of weekly declines ahead of a three-day holiday weekend.

The Dow Jones Industrial Average was riding an eight-week losing streak. The S&P 500 and Nasdaq Composite had also declined for seven straight weeks.

Consumer Discretionary and Energy names led the way higher last week, while the Healthcare sector lagged.

In economic action, IHS Markit said on Tuesday that both manufacturing and services activity declined in the U.S. during April.

Elsewhere, both durable goods orders and the core PCE price index showed decelerating growth last month. The latter is the key inflationary gauge of the Federal Reserve.

The Week Ahead

U.S. markets are closed on Monday for a holiday. Trading volume could be relatively light this week, as the calendar turns to June.

Salesforce.com (CRM) will post quarterly results on Tuesday, highlighting a quiet reporting calendar.

On the economic front, May U.S. consumer confidence will be posted on Tuesday. The Institute for Supply Management will announce its May data for the manufacturing sector Wednesday. This will be followed by services readings on Friday.

Friday also brings the May employment report. Estimates call for the addition of 350,000 non-farm payrolls and for the headline unemployment rate to tick down toward 3.5%.

Given a slowing growth outlook and the prospect of higher interest rates, it could become hard to come by investment gains in 2022. As a result, deciding what and when to buy can be challenging for any investor. However, the fact remains that investments with upside potential and other positive signals are out there if you dig a little deeper.

One such Technology name is worth a closer look and is our Stock of the Week.

Stock of the Week: Autodesk (ADSK)

The company produces 3D design, engineering, and entertainment software.

The stock gained more than 10% last week. It is showing signs that it has the potential to continue this relative outperformance into the second half of 2022. Here’s why:

The company is carrying solid operating momentum into the back half of the year. This was on display on Thursday, when management delivered better-than-expected quarterly results.

Autodesk earned $1.43 a share in the April quarter, as revenue increased 18% from a year ago, to $1.17 billion. The company expanded margins in the period and also has a 94% recurring revenue base, offering clear visibility for future growth. 

The stock is currently valued at 27.4x expected earnings over the next four quarters, which is a discount to its peers. It’s also lower than the 28% annual profit growth that management is expected to deliver next year.

Wall Street agrees that Autodesk has upside potential. The average price target of 16 active analysts tracked by TipRanks is $259, which is 22.5% higher than current levels.

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.

On top of the positive aspects mentioned already, the Smart Score indicates that shares have seen improving 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.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >

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