S&P 500 components Fortinet and Boston Scientific, and Burlington Stores, MasTec and Vertex are in focus for this week's stock market.
The Dow Jones and the S&P 500, fell Friday, slashing weekly gains. However, the stock market rally is acting well, despite remaining somewhat divided. End-of-year light trading and potential tax-related selling in early January could add some turbulence to the market.
With this is in mind, investors should keep an eye on these five stocks, which are setting up and are potentially actionable, as they assess current holdings and work on watchlists for stock market action.
Investors should also keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list for the week's stock market start.
Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks
Boston Scientific Stock
BSX edged down 0.9% to 90.66 during stock market trade on Friday. But shares rose 1.9% for the week, bouncing off the 50-day moving average and 10-week moving average.
Boston Scientific stock has been trading tightly for several weeks, forming a flat base with a 91.93 buy point as of Friday's close, according to MarketSurge charts. It should be noted the base is long, dating back to August.
Boston Scientific stock has gained around 57% in 2024 but the average analyst price target sits at 101.06, according to FactSet. That represents a further 11% upside for the S&P 500 medtech.
While BSX has surged in 2024, the 126 stocks in the IBD tracked Medical-Products industry group have collectively only advanced 1.5% this year.
Last week, Truist analysts raised their price target on Boston Scientific to 110 from 100 and kept a buy rating on the shares. The firm broadly sees the medical technology sector as "one of the better/safer houses" in health care given its lower "front-line" exposure to health care policy rhetoric that is tied to the White House change of guard.
Earlier this month, Citi also raised its BSX price target to 107 from 98. The firm predicts this year's BSX momentum will continue in 2025 with growth buoyed by the Farapulse pulsed-field ablation and continued adoption and penetration of the company's "Watchman" left atrial appendage closure device.
Boston Scientific was Thursday's IBD Stock Of The Day.
Boston Scientific stock has a 93 Composite Rating out of a best-possible 99. The stock also has an 88 Relative Strength Rating and a 92 EPS Rating.
Burlington Stores Stock
BURL fell 1% to 292 Friday, but rose 2.4% for the week. For weeks, shares have been trading in or near a buy zone from a cup-with-handle base buy point of 279.51 after breaking out on Nov. 22.
BURL stock is technically in the buy zone from that base. But it now has a new flat base with a 298.88 buy point. Investors could use Thursday's high of 295.18 as an early entry.
Burlington is featured in this Stocks Near A Buy Zone column.
Burlington has surged 67% from its April low. The stock is up about 50% so far this year and trading around its highest level since December 2021. Shares received a number of price-target hikes in the wake of Burlington's Q3 earnings report and Black Friday sales.
Burlington Stores on Nov. 26 reported a 41% increase in Q3 earnings to $1.55 per share adjusted, meeting FactSet expectations. Total revenue rose about 11% to $2.53 billion, short of estimates for $2.55 billion.
Chief Executive Michael O'Sullivan noted that third-quarter comparable-sales trends started out "very strongly" for the company's winter outerwear stronghold. However, comparable sales were up 4% during the quarter if cold weather categories were excluded, which represented 15% of sales for Q3. The comp growth is consistent with the trajectory Burlington has seen since March, O'Sullivan said, adding that the company is "very encouraged" by the underlying sales trend.
However, the discount retailer provided cautious guidance for the fourth quarter, expecting comparable-sales growth to range from 0% to 2%.
On Dec. 2 Goldman Sachs analysts added Burlington Stores to the firm's "U.S. Conviction List" as part of its monthly update. The firm has a buy rating on BURL shares with a 334 price target. Goldman sees Burlington's value offering as "ideally positioned for today's economy."
Several discounters, including off-price rival TJX Cos., have been acting well.
Burlington Stores stock has a 92 Composite Rating out of a best-possible 99. The stock also has an 86 Relative Strength Rating and an 88 EPS Rating.
S&P 500: Fortinet Stock Performance
Fortinet fell 1.2% to 96.08 in Friday's stock market, trading about 4% below a traditional 100.59 buy point from a flat base after a strong run-up on earnings, according to MarketSurge chart recognition. Shares ended the week just above their 21-day line.
A move above this past week's high of 97.83 could offer aggressive investors an early entry.
Fortinet competes in the firewall network security market vs. Palo Alto Networks, Check Point Software Technologies and others.
Firewalls reside between private networks and the internet. They block unauthorized traffic and check web applications for malware. As large companies shift to off-premise cloud computing services, one view is that firewall technology will play a lesser role. Fortinet has targeted software-defined wide area networks, or SD-WANs, an emerging computer networking technology.
In November, Fortinet provided three- to five-year financial targets, with expectations billings and revenue will grow at a 12% CAGR. The forecast came in slightly above analyst predictions.
The company did not give preliminary 2025 guidance.
Fortinet stock has a strong 99 Composite Rating. The S&P 500 stock also has a 93 Relative Strength Rating and a 99 EPS Rating.
MasTec Stock
MTZ shares sank 2% to 135.73 on Friday, back below its recently regained 50-day and 21-day lines. A move above the Dec. 24 high of 140.06 would break a downtrend and offer investors an early entry opportunity.
The stock has a three-weeks-tight pattern with a 150.12 buy point, according to MarketSurge chart analysis. It's working on a possible flat base but will need another week.
MasTec is an infrastructure and construction services firm with segments including communications, oil and gas and clean energy.
The communications segment performs engineering, construction, maintenance, and customer fulfillment activities related to communications infrastructure — primarily for wireless and wireline/fiber communications.
The firm is also involved in electric utility transmission and distribution along with heavy civil works projects and industrial infrastructure.
The company reported better-than-expected third-quarter earnings on Oct. 31, while revenue came in a little light. MasTec Q3 profit grew 70% and analyst consensus has Q4 EPS jumping 86%, according to FactSet.
Analysts project annual 2024 profit increasing more than 80% and surging 160% in 2025, compared to 2023 levels.
Truist analysts on Dec. 19 raised the price target on MasTec to 189 from 173, keeping a buy rating on the stock as part of a broader research note previewing 2025 for machinery and infrastructure services industrials. The price target hike represents further 36% upside for the stock.
The firm wrote that after a strong 2024, the anticipated large-scale investment in infrastructure, renewable energy and data center projects supports continued long term secular growth among infrastructure services names.
The stock has gained more than 80% in 2024 while the 21 stocks in the IBD-tracked Building-Heavy Construction industry group have collectively advanced 70% this year.
MasTec stock has a robust 91 Composite Rating. The stock also has a 91 Relative Strength Rating and a 69 EPS Rating.
Stocks End On Sour Note; Big Tesla News Due
Vertex Stock
VERX shares sank 2.1% to 52.71 during Friday's stock market action, but came off lows after undercutting the lows of its recent pullback. The financial software maker is back below its 21-day moving average. A move above Friday's high of 54.48 would break a short downtrend, offering an early entry.
Vertex stock is working on a possible new base, but needs more time. Shares also could test a rising 10-week line.
Vertex stock had several high volume gains throughout November, with several ANTS indicator marks on the MarketSurge chart. Several ANTS marks on a chart can be a signal to consider some profits in the short term. But it's also a reason to watch for a new base. The stock surged more than 30% in November but is down less than 1% in December.
On Dec. 18, Stifel analyst Brad Reback raised the firm's price target on Vertex to 58 from 52 and maintained a buy rating. Reback wrote that after a bumpy start to 2024, the year is "ending on a higher note" for the enterprise software group.
The analyst expects management to take a more conservative approach to Q1 guidance, but overall believes that "in general top-line growth rates should at least mirror what we have seen during the back half of 2024 due to many of the above mentioned factors."
Overall, the corporate tax compliance software maker has had a successful 2024, gaining around 100% so far. Recent acquisitions have helped the investment case for Vertex.
At the end of 2023, Vertex announced plans to acquire e-invoicing leader Pagero for $555 million. In June, the company acquired tax-specific AI technology and on Aug. 7, the company announced its intent to acquire Ecosio GmbH, an Austrian company that provides electronic data interchange and e-invoicing services.
Vertex stock has a perfect 99 Composite Rating. The stock also has a 95 Relative Strength Rating and a 93 EPS Rating.
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