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Market Movers of the Week: Pelosi Lifts Palo Alto, Constellation Up Despite Miss

Published 03/01/2024, 08:31 AM
Updated 09/02/2020, 02:05 AM
  • This week, Dow Jones is set to post small losses while the S&P 500 eyes modest gains and Nasdaq builds bullish momentum.

  • Meanwhile, some stocks that have performed well over the past week include names like Constellation Energy Corp and Palo Alto Networks.

  • In this piece, we will delve deep into why the stocks performed well over the week and their prospects going forward.
  • In 2024, invest like the big funds from the comfort of your home with our AI-powered ProPicks stock selection tool. Learn more here>>

This week, Dow Jones is on course to end the week slightly in the red. Meanwhile, the S&P 500 is poised to close with modest gains as the Nasdaq looks to end the week on a bullish note.

The 5 stocks that are making a difference for these indexes with solid gains are:

  • Constellation Energy (NASDAQ:CEG) +25.72%
  • Palo Alto Networks (NASDAQ:PANW) +10.09%
  • Saipem SpA ADR (OTC:SAPMY) +22.94%

What's Driving the Gains for These Stocks?

Constellation Energy's stock experienced a surge as it disclosed substantial institutional ownership within the group, with an 84% stake. This ownership is anticipated to play a pivotal role in shaping strategic decisions moving forward.

Despite reporting fourth-quarter earnings per share of -$0.11, which fell $1.91 below analysts' estimates of $1.80, Constellation Energy's revenue for the quarter was $5.8 billion, falling short of consensus estimates of $7.74 billion.

Palo Alto Networks stock posted strong gains after revealing that Nancy Pelosi has made a significant investment in the cybersecurity company.

Pelosi's investment includes holdings worth between $500,000 and $1 million (Feb. 12) and another set of call options estimated to be valued between $100,000 and $250,000 (Feb. 21), as reported in a financial disclosure form submitted to Congress.

Additionally, Saipem reported net profit of 179 million euros for the full year 2023, marking its best result in the last 10 years. This is a remarkable turnaround from the corresponding period in 2022 when the company reported a net loss of 209 million euros.

In this piece, we will analyze each stock using InvestingPro's Fair Value. The Fair Value is determined for each stock based on various financial models tailored to the stocks' specific metrics.

Constellation Energy

InvestingPro's Fair Value, which summarizes 13 investment models, stands at $109.87, or -34.8% less than the current price.

Fair Value

Source: InvestingPro

InvestingPro subscribers were able to follow the development of analysts' forecasts surveyed, as for the target price they are bearish on the stock, at $147.64.

While analysts and Fair Value are currently in agreement on the downside possibilities, good news comes from the low-risk profile. The company is in good financial health, with a score of 3 out of 5.

Delving deeper, we can see how the comparison with the market and competitors, sees the possible downside confirmed, the stock at a potentially overvalued valuation. Constellation Energy Peer Comparison

Source: InvestingPro

Looking at the best-known indicators, Constellation Energy is now worth more than 2X its revenues compared to the industry's 1.5x, and the Price/earnings ratio at which the stock is trading is 32.9X against an industry average of 11.3x, which stands to highlight its extreme overvaluation.

Palo Alto Networks

InvestingPro's Fair Value, which summarizes 12 investment models, stands at $285, or -8.2% from the current price.

Fair Value Palo Alto Networks

Source: InvestingPro

The analysts interviewed hold a bullish view, setting a target price at $335.92.

Despite differing opinions between analysts and Fair Value regarding the likelihood of a rise, the positive aspect lies in the low-risk profile.

The stock demonstrates excellent financial health with a score of 4 out of 5. Additionally, when comparing the stock with the market and competitors, further confirmation suggests that the stock may currently be overvalued.


Palo Alto Networks Peer Comparison

Source: InvestingPro

Palo Alto Networks is now worth more than 13 times its revenues compared to two times in the industry, and the Price/Earnings ratio at which the stock is trading is 44X against an industry average of 11.4x, which stands to confirm its strong overvaluation.

Saipem

InvestingPro's Fair Value, summarizing 9 investment models, pegs Saipem's value at $0.34, reflecting a +16.6% increase compared to the present price.

Fair Value

Source: InvestingPro

While analysts and Fair Value align on the potential for an upward movement, less reassuring is the risk profile, currently marked at a fair level of financial health, with a score of 2 out of 5.

Further analysis reveals that when compared to the market and competitors, the stock is positioned with a potential undervaluation.

Saipem Peer Comparison

Source: InvestingPro

Examining the prominent indicators, Saipem's valuation is currently at 0.3x of its revenues, in stark contrast to the industry's 1.2x.

The Price/Earnings ratio of the stock stands at -45.3x, a significant deviation from the industry average of 4.2x, emphasizing its undervalued status.

Conclusion

In conclusion, Constellation Energy Corp and Palo Alto Networks showcase robust financial health with well-defined strengths. However, the fair value indicates that both stocks could see a downside at current levels.

The substantial gains registered over the past year, amounting to 121% for the former and 64% for the latter, may prompt a reversal sooner or later.

As for Saipem, the stock exhibits several significant strengths, including an average Fair Value and optimistic forecasts reflected in analysts' target prices.

However, it falters in the financial health score. Despite this, the stock has delivered a positive performance of 9.62% in the last year.

***

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

Latest comments

So why did Nancy make this buy? No speculation from you?:-)
How can Nancy Pelosi own millions of dollars in stocks and options on a Congress salary?
Have you ever heard of corruption?
Is this the same writer who recommeded buying PANW right before it dropped 28% after the incompetent CEO Nikesh Arora (no surprize there) gave a ridiculous forward earnings prediction that he later back tracked on ! Now PANW is a buy? Investing .com who is the HS student checks these articles!
it wasn't him...
salut comment sava
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