Last week saw the stock market close lower than it could have absent prevailing inflation fears, with consumer sentiments now expecting inflation to raise a substantial 4.8% over the next year. And on Tuesday, the consumer price index showed a 5.4% increase year over year as it grows at its fastest pace in over 12 years.
While the S&P 500 and Dow Jones Industrial Average both reached new all-time highs last week, all three major averages closed the week lower, snapping their respective three-week hot streaks. The S&P 500 lost 0.97% on the week, with the Nasdaq Composite down a significant 1.87%. The Dow gave up the least gains for the week at just 0.52%.
But despite the inflationary hubbub, a number of stocks stamped their name on the week as members of Q.ai’s top trending lists. Let’s take a look at some of the biggest trending names for the week – and whether they’re worth a spot in your portfolio.
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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The Boeing Company (BA)
The Boeing Company dropped 2.3% Friday to end the week at $217.74 per share on volume of 12.4 million trades. The stock is up 1.7% for the year, though down substantially from its 22-day price average of just over $237, and trading at 173.2x forward earnings.
While many of Boeing’s recent appearances on our trending list have been due to negative media coverage or yet another setback, the aircraft manufacturer is trending on good news this week. Last month, the company realized the culmination of three years of designing, developing, and testing a drone tanker known as the MQ-25 “Stingray” drone.
This remotely piloted, carrier-capable aerial refueling aircraft completed its first successful in-air refueling last month on 4 June. But the test was just the first proof-of-concept run for Boeing’s latest innovation, as Boeing is now moving into an advanced “engineering and manufacturing development” prototype built to withstand the needs and pressures of taking off from, landing on, and surviving the salty sea conditions of an aircraft carrier.
Hopefully, this piece of good news is one of many that will propel Boeing back to its former glory. Over the last three fiscal years, Boeing’s revenue plunged from $101 billion to $58 billion, with its operating income falling from $11.8 billion to $8.67 billion in the same period. Meanwhile, per-share earnings actually rose from $17.85 to $20.88.
Currently, Boeing is expected to see 12-month revenue growth around 7.4%. Our AI rates this aviation stock C in Growth, D in Technicals, and F in Low Volatility Momentum and Quality Value.
Delta Air Lines, Inc (DAL)
Delta Air Lines, Inc plunged 3.1% Friday to end the week just above $40 per share with 16.7 million trades on the docket. The stock is down 0.4% for the year and more than $3 from its 22-day price average. Currently, Delta Air Lines is trading at 15.7x forward earnings.
Delta is trending this week after posting quarterly earnings that exceeded analysts’ expectations, with a pretax adjusted loss of just $881 million compared to $2 billion in the first quarter. And thanks to $1.5 billion in federal grants to cover payroll costs, as well as rising air travel as Covid-era restrictions ease and travelers once again take to the skies, Delta actually managed a net income of $654 million.
These numbers are a welcome change of pace for Delta after the company saw its revenue plunge from $44.4 billion three years ago to just $17 billion in the most recent fiscal year. That said, federal aid actually boosted the airliner’s operating income from $5.5 billion to $9.2 billion. Additionally, per-share earnings leapt from $5.67 to $19.49 in the period, with return on equity skyrocketing to an astronomical 146.6% compared to just 30%.
All told, Delta’s revenue is expected to climb 28.5% over the next twelve months. Our AI rates this sky-high flier D in Technicals and F in Growth, Low Volatility Momentum, and Quality Value.
Mastercard, Inc (MA)
Mastercard, Inc nudged down 0.8% Friday to $387.12 per share, closing out the day at 2.7 million trades. The stock is up 8.5% for the year and trading at 46x forward earnings.
Mastercard made our trending list last week – and continues to trend now – for a pair of reasons. The first was a report that Mastercard and Verizon have partnered up to focus on 5G contactless payments for consumers and small-to-midsize businesses, with plans to innovate and create new solutions for the smallest in society by 2023.
The second piece of news is a little less fortunate: on 14 July, the Reserve Bank of India banned the card-issuing behemoth from issuing new debit, credit, or prepaid cards in the country indefinitely. The central bank said in a statement that Mastercard has failed to comply with a 2018 regulation that requires all payment providers to store data on Indian users and transactions solely on local servers.
While the RBI’s move against Mastercard may hinder its future growth if not resolved, it’s unlikely to cut too severely into the card giant’s bottom line. In the last three fiscal years, Mastercard’s revenue grew 3.3% from $14.95 billion to $15.3 billion, with per-share earnings leaping from $5.60 to $6.37. That said, operating income is down slightly to $8.2 billion, whereas return on equity has slipped from 106% to 102.5%.
All told, Mastercard is expected to see around 4.8% revenue growth in the next 12 months. Our AI rates this financial behemoth B in Low Volatility Momentum and Quality Value and C in Technicals and Growth.
Verizon Communications, Inc (VZ)
Verizon Communications, Inc nicked down 0.16% to $56.46 on Friday on the back of 11.6 million shares trading hands. The stock is down almost 4% for the year and trading near 11x forward earnings.
The news of Mastercard and Verizon’s partnership was, not surprisingly, also a positive bit of media attention for Verizon last week. But a company as large as Verizon rarely trends on just one piece of news. In addition to its upcoming 5G innovations, Verizon last week released THOR, its Tactical Humanitarian Operations Response vehicle. This beastly red truck is the literal embodiment of 5G communication on wheels, designed to provide public sector partners with “Verizon Frontline” technology in the case floods, wildfires, and other catastrophic events.
THOR aside, Friday also saw Verizon strike an $8.3 billion deal with Swedish telecoms gear maker Ericsson to accelerate 5G deployment in the United States. For Verizon, the future is coming up 5G.
Over the last three fiscal years, Verizon saw its revenue shrink ever so slightly, from $130 billion to just $128 billion, while operating income slipped from $31.7 billion to $31.4 billion. At the same time, per-share earnings grew 21.3% from $3.76 to $4.30.
Currently, Verizon is expected to see 12-month revenue growth around 0.9%. Our AI rates this tech and communications giant A in Low Volatility Momentum, B in Quality Value, and C in Technicals and Growth.
Morgan Stanley (MS)
Morgan Stanley slipped 1.5% on Friday, trading 12.6 million shares down to a final share price of $91.25 on the day. The stock is up 33.2% for the year and currently trades at 13.2x forward earnings.
Morgan Stanley was one of a half-dozen financial institutions to report its Q2 earnings last week – and its results did not disappoint. The investment bank’s results outperformed on multiple accounts, with equities trading producing $2.83 billion in revenue, comprising a significant portion of the firm’s $7.1 billion revenue in trading and advisory operations. Meanwhile, wealth management raked in $6.1 billion, with investment management topping $1.7 billion.
Over the last three fiscal years, Morgan Stanley’s revenue has grown a substantial 37.7%, closing out last year at $48.2 billion compared to $40.1 billion three years prior. Meanwhile, operating income is up a hefty 57.5% to $17.9 billion, with per-share earnings jumping 59.5% to $6.46 in the last fiscal year.
Currently, our AI rates this investment bank and financial guru B in Growth and Low Volatility Momentum, C in Quality Value, and D in Technicals.
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