S&P 500 index components GE Aerospace (GE), Cintas (CTAS) and Lam Research (LRCX) are in focus this week along with Dow Jones giant Merck (MRK) and Celsius Holdings (CELH).
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The stock market rally had a mixed week, with the Nasdaq rising solidly to record highs despite Thursday’s downside reversal. But the Dow Jones fell sharply for the week.
These five highlighted stocks are all showing relative strength and should be on investors’ watchlists.
Celsius was Thursday’s IBD Stock Of The Day. The stock also sits on the IBD 50, the Leaderboard watchlist, and the IBD Big Cap 20.
S&P 500: GE Stock
Shares of GE Aerospace gained 1.2% to 167.29 Friday, advancing 4.6% on the week. The S&P 500 stock is bouncing off its 21-day line. That offers a potential add-on entry.
GE stock is slightly below a 170.80 buy point in a three-weeks-tight pattern, MarketSurge pattern recognition shows. That’s another place existing holders could add shares.
If GE stock continues basing for a couple more weeks, a flat base pattern could form.
Year to date, the S&P 500 stock has surged 64%. It has more than doubled over the past year. On May 7, GE stock hit its best level in 15 years, then pulled back a bit.
The Relative Strength line is just below 52-week highs after a long uptrend. The RS line, the blue line in IBD charts, tracks GE stock’s progress vs. the S&P 500.
Is GE Stock A Buy Or A Sell Right Now?
GE Aerospace — once called GE’s “crown jewel” — makes jet engines and aviation systems for plane makers like Boeing (BA), as well as the military. It also runs a lucrative aftermarket business for engine repair and maintenance.
The aerospace and defense pure-play company emerged from General Electric’s big breakup, after the spinouts of GE Vernova (GEV) and GE HealthCare Technologies (GEHC). GE Aerospace kept the GE ticker symbol.
GE stock has a muscular 97 Composite Rating. Shares also have a near-perfect 96 Relative Strength Rating and a 77 EPS Rating.
Dow Jones: Merck Stock
Merck fell 1.3% this week to 129.48, but still close to an official flat-base buy point of 133.10. The Dow Jones stock is up around 1.3% in May.
Among the best stocks in the Dow Jones index, drug giant Merck is above its 50-day moving average and generally finding support with its 21-day exponential moving average.
However its RS line has retreated over the past month.
On April 25, Merck jumped after the Dow Jones stalwart topped first-quarter views on the back of its cancer treatment drug, Keytruda.
Revenue from the immuno-oncology drug surged 20% on a strict, as-reported basis to $6.95 billion. That was well above expectations for $6.71 billion, according to FactSet.
Merck has yet to notch any revenue from its new drug, Winrevair. The Food and Drug Administration recently approved Winrevair for patients with pulmonary arterial hypertension, or PAH.
For 2024, Merck expects $63.1 billion-$64.3 billion in sales and adjusted profit of $8.53-$8.65 per share.
The Dow stock has a 72 Composite Rating out of 99. The stock’s Relative Strength Rating is 71. The EPS Rating is 44 out of 99.
Celsius Stock
CELH shares gained 3.8% to 95.15 on Friday. For the week, Celsius stock advanced 2.3%. The S&P 500 stock may be working on a handle near the top of a cup base. That would slightly lower the official buy point from the current 99.62.
The 32%-deep cup base found support near the top of a prior consolidation. Its latest entry comes after the stock turned in a 44% gain from its previous consolidation entry of 68.95.
The stock’s relative strength line is sitting right around fresh highs on its weekly chart.
Celsius has rocked this year as its Q1 results from May marked five straight quarters of triple-digit earnings growth. The Boca Raton, Fla.-based company on May 7 reported a 108% jump in earnings to 27 cents per share, clearing estimates of 20 cents per share. Revenue for the energy drink maker leapt 37% to a first quarter record $355.7 million, but fell short of expectations of $390.4 million.
Celsius ranks as the third most-popular energy drink in the U.S., trailing Red Bull and Monster Beverage (MNST), with an 11.4% share of all energy drink sales at multi outlet with convenience stores (MULOC) locations in Q1.
Celsius earnings in the second quarter are expected to jump nearly 53% to 26 cents per share on 30% revenue growth to $424 million, according to FactSet. Full-year earnings are seen increasing about 46% to $1.12 per share while revenue jumps 32.5% to $1.75 billion.
Celsius stock has a perfect 99 Composite Rating. The stock’s RS Rating is a strong 97. The EPS Rating is 80 out of 99.
S&P 500: Lam Research Stock
LRCX shares advanced 1.3% to 970.57 Friday, as part of a 6.4% weekly gain. The S&P 500 component is in a flat base with a buy point of 1,007.39, according to MarketSurge charts. Investors could use Thursday’s high of 992.66 as a trigger for a trendline entry.
On May 21, the chip-equipment maker announced a 10-for-1 stock split and a $10 billion stock buyback program.
CFO Doug Bettinger said in the news release that share repurchase authorization is “consistent with our plan to return 75% to 100% of free cash flow to stockholders in the form of dividends and share buybacks.”
In late April, Lam Research handily beat expectations for its fiscal third quarter and guided higher than views for the current period.
Earnings rose 11% vs. a year earlier, ending a four-quarter string of declines. Revenue dipped 2% to $3.79 billion, a much smaller decline than in prior quarters.
The S&P 500 member guided to adjusted Q4 earnings of $7.50 a share on sales of $3.8 billion, which would be double-digit gains for both.
Lam Research is No. 9 out of 26 stocks in IBD’s semiconductor equipment group. The 26 stocks in the group have collectively gained nearly 22% in 2024.
Lam Research stock has an 86 Composite Rating out of 99. The S&P 500 stock’s Relative Strength Rating is 89. The EPS Rating is 81 out of 99.
S&P 500: Cintas Stock
IBD Long-Term Leader Cintas dropped 1.9% Friday, ending the week down 1.35% to 682.81. The S&P 500 stock is currently trading modestly below a flat-base buy point of 704.84.
The 5% buy zone here tops out at 740.08, according to IBD analysis.
The workplace equipment and cleaning supplies stock rebounded after getting support at its 50-day line. Cintas currently just below its 21-day exponential moving average.
The relative strength line has dipped in the past two weeks but from record highs.
It has recently dipped but is still at a robust 88. The S&P 500 stock has gained around 16% so far this year, outperforming the broader market.
Cintas is a leading provider of uniforms for hospitals, hotels and other industries. The company’s earnings per share popped 22% in the most recent quarter to $3.84, while revenue jumped nearly 10% to $2.4 billion.
It was the second straight quarter of accelerating top- and bottom-line growth.
Gross margin as a percentage of revenue rose to 49.4% from 47.2% the year prior.
Cintas forecasts 2024 revenue of $9.57 billion to $9.6 billion, up from the prior forecast of $9.48 billion to $9.56 billion. It guided earnings of $14.80 to $15 per share, compared with the prior outlook of $14.35 to $14.65.
CTAS stock has an 89 Composite Rating out of 99. The S&P 500 component’s Relative Strength Rating is 86. The EPS Rating is 95 out of 99.
Please follow Kit Norton on X @KitNorton for more coverage.
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