Facebook-parent Meta Platforms, GE Aerospace and Chipotle Mexican Grill rank among this week's top five stocks to watch as they offer early entries from rebounding action off key support. Nextracker and Pinterest also make the cut.
Pinterest stock belongs to IBD Leaderboard. Both Pinterest and Chipotle stock earn a spot on IBD SwingTrader. Other top lists for stocks to buy and watch include the IBD Long Term Leaders list, as well as the IBD 50 list of top growth stocks.
The relative strength lines for four of the five stocks to watch show a strong uptrend in the past year. The exception is Nextracker, though the RS line for the solar stock has surged in the past month. A rising RS line, the blue line in the charts shown, means a stock is outperforming the S&P 500 index.
The stock market flashed a deeper green signal to investors this past week, with the S&P 500 and Nasdaq-100 making fresh records.
Meta Stock
Shares of the Facebook and Instagram parent jumped 5.6% to 492.96 last week, reclaiming the 50-day and 10-week lines, which had served as resistance.
Meta stock's bounce above the 10-week line offered an early entry in a two-month consolidation, with an ugly earnings gap down on April 25. The buy point is 531.49. Ideally, Meta would forge a handle to create a lower official entry.
It would be a good sign if the RS line catches up with the stock if and when it breaks out. The RS line for Meta stock remains some distance below the all-time high from early April.
Meta counts among the Magnificent Seven stocks that powered the market rally from late 2022 lows.
The social media giant reported first-quarter earnings on April 26. On a year-over-year basis, Meta earnings rebounded 117% per share as sales climbed 27%, marking the highest top-line growth in over two years. Meta also signaled a new investment cycle, driven by artificial intelligence, driving a sharp sell-off in huge volume the week of April 26. Meta's investment cycles tend to weigh on share prices.
On a per-share basis, Meta earnings rebounded 73% in 2023. Analysts expect 36% growth this year, slowing to a 15% gain in 2025. Sales are seen rising a respective 18% and 13% in 2024 and 2025.
Meta earns an IBD Composite Rating of 98 and an EPS Rating of 97, both out of a best-possible 99. A 94 RS Rating means that it has outperformed 94% of all stocks in IBD's database over the past year.
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GE Aerospace Stock
Shares of the new aerospace pure-play company fell modestly for a second straight week, but found support at the 10-week moving average. GE stock eyes a 170.80 buy point from a new flat base, still 6% below the entry. It's up 72% from a prior flat-base breakout last January, MarketSurge pattern recognition shows.
The consolidation has come in lower-than-average volume after heavy buying on the way up.
GE stock owns an IBD Composite Rating of 97, EPS Rating of 77 and RS Rating of 96.
On April 23, the company posted a 281% EPS surge for the first quarter on an 11% sales rebound. The results included those of the new GE Vernova, which is now a stand-alone company like GE Aerospace after the old GE's final, two-way split in April. Revenue for GE Aerospace alone rose 15% in Q1.
In April, GE guided full-year EPS of $3.80-$4.05 for the standalone GE Aerospace business, based on the company's "strong start (in Q1) and constructive outlook for the rest of the year."
Chipotle Stock
Shares of burrito chain Chipotle Mexican Grill rallied 1.3% after three down weeks, rebounding from the 10-week line. The stock is actionable from the 10-week bounce as well as a break of the downward trendline from the April high.
CMG stock needs another week to forge a flat base with a traditional buy point of 3,260, which also marks the May 10 record high.
Chipotle stock holds an IBD Composite Rating of 99, EPS Rating of 98 and RS Rating of 94.
On April 25, the company disclosed that earnings climbed 27% in the first quarter as sales ramped 14% higher. That marked the second straight quarter of accelerating earnings growth.
Chipotle delivered 37% earnings growth in 2023. Analysts project 24% profit growth this year, slowing again to a 20% gain in 2025.
Chipotle shareholders on Thursday approved a 50-for-1 stock split, which was approved by its board months ago. The split will take place later this month.
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Nextracker Stock
Shares of the solar energy play rose 0.9% for the week, extending a late May rally above the 10-week line. MarketSurge shows Nextracker stock in a cup-with-handle base with a 58.49 buy point.
The cup-with-handle base shows a 28% jump in big volume the week of May 24. That followed strong earnings the prior week. However, much of the base has formed below the 10-week line and even the 200-day line, a negative sign.
Nextracker will join the S&P MidCap 400 index before the open on June 24, S&P Dow Jones Indices announced Friday night. NXT stock rose modestly late Friday.
Notably, Nextracker stock held up well in 2023's solar stock sell-off. In 2024, solar stocks at large have returned to form, currently ranking an elevated No. 14 out of 197 industry groups tracked by IBD.
Nextracker stock holds an IBD Composite Rating of 99, EPS Rating of 98 and RS Rating of 86. The near-perfect 98 EPS Rating is among the highest in the solar stock group.
On May 15, the solar company delivered a 151% EPS jump for its fiscal fourth quarter as sales grew 42%.
On a per-share basis, Nextracker earnings nearly tripled in the fiscal year ended March 2024, increasing 192%.
Analysts forecast a 2% profit decline for the current year and a 13% rebound next fiscal year. Sales are seen growing 15% and 13% over these respective periods.
The company provides software and tracking technologies for global solar projects. Through Nextracker's tracker tools, solar panels can track the movement of the sun and increase energy production.
Pinterest Stock
Shares of the social media company rallied for a second consecutive week, jumping 6.3% to 44.11. In the past week, Pinterest stock rebounded from the shorter-term, 21-day line to reclaim a 41.60 buy point. On Friday, the stock cleared the top of the buy zone, which goes to around 43.61.
The cup base shows a 21% earnings breakaway gap in huge volume the week of May 1. After moving into the buy zone, shares pulled back in late May to the 21-day line.
Pinterest stock holds an IBD Composite Rating of 99, EPS Rating of 98 and RS Rating of 94.
On April 30, the company revealed a 150% EPS surge for the first quarter on a 23% revenue gain. Sales growth accelerated for a fifth straight quarter and quickened sharply from a 12% gain the prior quarter.
On a per-share basis, Pinterest earnings growth rebounded 76% in 2023 from a hefty decline the previous year. Analysts anticipate 33% profit growth in 2024, slowing further to a 23% rise in 2025.
Notably, the Pinterest platform continues to gain ground with a sought-after group of American consumers: Gen Z, young Americans entering the workforce in greater numbers.
"We're continuing to win with Gen Z," Pinterest Chief Executive Bill Ready said on the Q1 earnings call. "They are more than 40% of the users on the platform and our largest and fastest-growing demographic."
The Pinterest app allows users to search, save and shop ideas for food, fashion, and home decor.
