The broader market averages declined on Friday, as the S&P 500 lost fractionally last week.
Energy names led the way lower, while the Consumer Staples sector was a rare beacon of strength.
Mounting tensions between Russia and Ukraine drove volatile trading last week, ahead of an extended weekend for U.S. markets.
In economic action, it was reported on Tuesday that core U.S. producer prices (PPI) increased 8.3% in January, excluding food and energy. Elsewhere,January retail sales exceeded expectations.
The Week Ahead
55 members of the S&P 500 are scheduled to post quarterly results this week, as earnings season winds down.
Some key reports on the docket include:
Feb. 22: Home Depot (HD) and Medtronic (MDT)
Feb. 23: Lowe’s (LOW)
According to Refinitiv, aggregate S&P 500 profit is expected to increase 31.8% in the fourth quarter of 2021, bolstered by the Energy sector.
In economic activity, the EU purchasing managers’ index (PMI) will be released on Monday, followed by U.S. PMI the following day.
We’ll also get the core PCE price index on Friday, which is the Federal Reserve’s key inflation gauge.
Following the snap-back recovery in stocks over the past several quarters from Pandemic lows, we believe that investment gains will be harder to come by in 2022, given a slowing growth outlook and the prospect of higher interest rates.
As a result, deciding what and when to buy can be challenging for any investor.
However, the fact remains that attractive investments are out there, if you’re willing to dig a little deeper.
One such Industrial name is worth a closer look and is our Stock of the Week.
Stock of the Week: Crown Holding (CCK)
The company makes beverage and food packaging, in addition to various industrial goods.
The stock gained 4% last week and we believe this outperformance can continue in the first half of 2022.
Here’s why:
Crown exhibits defensive growth characteristics that were on display earlier this month, when management posted quarterly profit that surpassed expectations.
The company earned $1.66 a share in the fourth quarter of 2021, as revenue increased 24% from the previous year, to $3.05 billion.
At current levels, the stock is valued at just 14.9x expected earnings over the next four quarters, which is a discount to the broader market. Management is one group that sees value in the company and regularly buys back shares.
Wall Street also sees value in Crown. The average price target of 12 active analysts tracked by TipRanks is $140.27, which represents 16.2% upside potential.
In the meantime, the stock carries a Smart Score of 8/10 on TipRanks. This proprietary score utilizes Big Data to rank stocks based on 8 key factors that have historically been a precursor of future outperformance.
On top of the positive aspects mentioned already, the Smart Score indicates that shares have seen improving sentiment from financial bloggers.
FYI: This is just 1 of the 20+ stocks selected for the Smart Investor portfolio. That’s where we share more detailed insights on our weekly stock picks.
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 >