Stocks on Wall Street ended the week on a high, with indices looking past inflation worries, while most major averages closed in view of their recent records. It posted a weekly gain of 1.9% to record its fourth consecutive winning week, fueled by a rally in mega-cap tech stocks.
The benchmark, meanwhile, reached 0.4% to mark the third winning week in a row. However, the blue chip underperformed, falling 0.8% over the same period as investors cycled out of value stocks.
Dow, SP, NASDAQ daily charts
Given the Federal Reserve's key monetary policy and more important economic data, including the latest report, the coming week is expected to be a busy one on Wall Street.
No matter which direction the market takes, below we highlight one stock that is likely to be in high demand and another that could fall further.
Remember, however, that our timetable is for the coming week only. while investors await the latest financial results from one of the world's leading electronic manufacturing services (EMS) providers.
The St. Petersburg, Florida-based company, best known for supplying components for iPhones and other Apple (NASDAQ:) devices, has thrived this year amid rising demand for its products and services.
Year-to-date, Jabil, which operates 100 factories in 30 countries and has more than 260,000 employees worldwide, has seen its inventory rise by 36%. It has nearly doubled in the past 12 months, increasing by about 90% year-on-year.
After hitting a new 52-week high of $58.28 on Friday, JBL stock closed the session at $57.89, a level not seen since November 2000. At its current level, the manufacturing service business has a market capitalization of approximately $8.6 billion.
Jabilwhich has crushed earnings and earnings expectations in recent years, is slated to report fiscal year third quarter numbers ahead of the US market opening on Thursday .
Consensus expectations call for earnings per share of $1.04, a jump of a staggering 181% from earnings per share of $0.37 in the same period a year ago. Meanwhile, annual sales are expected to grow nearly 10% to $6.95 billion.
Besides the top and bottom-line numbers, investors hope Jabil management will maintain its optimistic outlook for the remainder of the year, after raising forecasts in the previous quarter, citing strong secular winds in the economy. back and accelerated momentum in many of its end markets.
Jabil is primarily engaged in design engineering, manufacturing and supply chain services for the EMS and consumer industries. It also provides materials technology services, such as plastics, metals, automation and tools.
The manufacturing contractor's customers span a variety of industries, including consumer products, computing, storage, networking and telecommunications, healthcare, defense, aerospace, automotive, as well as clean technology and instrumentation.
Stock to dump: Vertex Pharmaceuticals
Investors may want to stay away from shares of Vertex Pharmaceuticals (NASDAQ:) this week after the biotech company said it would forgo further development of an experimental drug that is designed to treat a rare genetic disease: AAT deficiency (AATD) – which can lead to liver and lung disease.
The company said late last week that the Phase 2 trial of VX-864 has met its primary endpoint, but the results are unlikely to lead to substantial patient benefit.
The setback doesn't bode well for Vertex, which is now likely to fall further behind rivals Arrowhead Pharmaceuticals (NASDAQ:), and Takeda Pharmaceutical (NYSE:) in the race to develop a treatment for the rare genetic condition.
Vertex's next candidate for the treatment of AATD is unlikely to be tested in humans until 2022 at the earliest.
Vertex stocks have fallen nearly 18% since the beginning of the year, significantly underperforming the comparable returns of both the Dow and S&P 500 over the same period.
VRTX shares — now about 37% lower than their all-time high of $306.08, reached in July 2020 — closed Friday's session at a more than two-year low at $193.02, leaving it in Boston. Massachusetts-based biotech company was valued at about $50 billion.
From a technical standpoint, VRTX stock is now firmly below the 50-day, 100-day and 200-day moving averages, usually indicating more selling pressure going forward.
Taking this into consideration, it appears that Vertex stock will continue to lag behind in the coming days, with investors increasingly concerned about the drug maker as it struggles to diversify its offering beyond are core drugs against cystic fibrosis.
