 ONON, RDDT, and AVGO are three stocks from three different sectors, all poised for breakouts, reflecting broader market strength.. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ |
| | Written by Ryan Hasson 
After a slow start to the year, U.S. equities have surged to new record highs following President Trump’s inauguration. By Wednesday’s close, the SPDR S&P 500 ETF Trust (NYSE: SPY) had gained over 4% for the week, bringing its year-to-date (YTD) return to an impressive 3.47%. This rally has been marked by unusually strong market breadth, with stocks from various sectors, including retail, communication services, and energy, showing positive momentum. The current rally appears more balanced than in prior years when the so-called Magnificent Seven largely dominated market performance and breadth. So, let’s look at three stocks from three different sectors that are on the verge of a breakout. On Holding AG : Outpacing Its Sector Despite an underperforming retail sector, as evidenced by the SPDR Retail ETF (NYSE: XRT) being down 0.55% YTD, On Holding AG (NYSE: ONON) has demonstrated impressive relative strength. The company, which designs and sells high-performance running footwear and apparel globally, has outpaced its sector by climbing almost 7% on the year as of Wednesday's close. Following a pullback toward its rising 50-day simple moving average (SMA) earlier this month, On Holding broke out to new all-time highs on Tuesday. While it retreated slightly on Wednesday, the stock’s ability to reclaim and maintain support above $60 could signal further upside. This $60 level is quickly emerging as a crucial inflection point, and traders should pay close attention to it going forward. Analysts are bullish on the stock, with a consensus Moderate Buy rating and price target that forecasts the potential for additional upside. Morgan Stanley recently boosted its price target for the stock from $62 to $65, citing its strong gross margins and potential for sales growth acceleration. With the retail sector underperforming, On Holding’s resilience and upward trajectory make it a standout name. Reddit Inc: New All-Time Highs and Continued Momentum Reddit Inc.(NYSE: RDDT), known for its digital communities, such as the infamous WallStreetBets, has achieved fresh all-time highs this week. After consolidating above previous resistance at $160, Reddit turned this level into firm support over the past two months. On Tuesday, the stock surged above $180, confirming a breakout to new highs. Technically, maintaining $180 from now on as support will be critical for Reddit’s continued upward momentum. However, the stock’s lofty valuation, with a forward P/E ratio of 222, might suggest some caution. Despite this, sentiment remains optimistic, with analysts assigning a Moderate Buy rating. Out of 21 analysts, most maintain favorable outlooks, though the consensus price target is approximately 14% below Wednesday’s closing price. Traders should also monitor Reddit’s upcoming Q4 earnings report, scheduled for February 12. This event could be a significant catalyst, potentially sustaining or disrupting the stock’s current bullish trajectory. Broadcom Inc: Positioned for a Bullish Breakout Semiconductor giant Broadcom Inc. (NASDAQ: AVGO), a technology company renowned for its global presence in designing and developing semiconductor and infrastructure software solutions, is currently in a significant bullish consolidation near its all-time high. This movement coincides with the Trump administration and tech giants like Oracle, Microsoft, and OpenAI, announcing the formation of a new company named Stargate. This venture aims to bolster artificial intelligence infrastructure in the United States with an initial investment of $100 billion, with plans to increase this to up to $500 billion in the coming years. Following this announcement, the Semiconductor ETF (NASDAQ: SMH) broke out from a prolonged consolidation phase, while several semiconductor stocks saw substantial upward momentum on Wednesday. AVGO, which previously broke out after stellar earnings in December, has been consolidating near its peak in a bullish pattern. Should AVGO surpass the short-term resistance of $247, it might signal the start of another significant upward trend. AVGO holds a Moderate Buy rating, echoing the sentiment of the above stocks. Recently, analysts from Barclays and Mizuho have also raised their price targets for the stock, reflecting optimism about its future performance.  Read This Story Online | As we step into 2025, artificial intelligence (AI) continues to revolutionize industries with groundbreaking advancements. From the surge in generative AI technologies transforming creative processes to AI-driven automation enhancing operational efficiencies, the landscape is brimming with innovation. These rapid developments are creating lucrative opportunities for investors who recognize the potential of emerging AI companies. 👉 Click here to access your FREE report now! |
| Written by Thomas Hughes 
Kinder Morgan's (NYSE: KMI) stock price is up 100% since late 2023 and is heading higher in 2025. The company’s results are underpinned by increasing demand for its core products, amplified by an expanding footprint, and the rally by results and capital returns. The company’s payout ratio may scare investors at first glance, but have no fear; the nearly 100% payout ratio to adjusted earnings isn’t the figure that matters. Once an MLP, the company continues to pay its investors as if it is one. That means dividends are relative to distributable cash flow sufficient to sustain the high-yielding payment, the distribution growth outlook, and the healthy balance sheet while the company internally funds its growth projects. Kinder Morgan has numerous expansion projects, including the recently announced Trident Intrastate Pipeline Project. This project will connect critical LNG infrastructure in Katy, TX, with Port Arthur and is backed by long-term customer contracts that guarantee profitability. Other projects improve handling and distribution capacity, providing business leverage in 2025 and beyond. Critical takeaways from the LNG outlook are that prices will remain solid in 2025, supported by increasing demand in industrial, power generation, data centers and consumer sectors. Demand growth, critical to KMI performance, will be most substantial abroad, and U.S. operators like Kinder Morgan are positioned to meet it. Paraphrasing KMI CEO Kimberly A. Dang, with President Trump in office and demand growth present, the future is bright for Kinder Morgan and other pipeline operators. Kinder Morgan Misses Q4 Estimates: So What? Kinder Morgan reported a weak quarter relative to the analyst's consensus forecast reported by MarketBeat, but operational improvements offset the miss. The $3.99 billion in revenue is down 1.2% YOY, missing the consensus by 400 basis points as softness in the products pipeline segment offset strength in natural gas. The critical takeaway is that operational improvement drove EBDA growth in most segments and systemwide, resulting in a solid double-digit bottom-line gain. The $0.32 in adjusted earnings missed consensus by a penny but are up 14% with similarly substantial gains in adjusted EBITDA, net income, and FCF. Guidance is a factor in the post-release price action. The company issued solid guidance for 2025, expecting net income attributable to investors to rise by 8% to $2.8 billion. Adjusted EPS and the dividend are also forecasted to grow. The dividend forecast is tepid, with only 2% growth, but the pace is sustainable and allows for reinvestment and debt reduction. The company’s net debt-to-adjusted EBITDA ratio is down 40 bps for the quarter to 3.8X and is forecasted to fall at least 20 basis points in 2025. Balance sheet highlights also point to sustained distributions and increases, with increased cash and assets offsetting liability, equity rising incrementally, and total leverage very low—only 1.25X shareholder equity. Analysts Trends Support KMI Stock Price and Tailwinds Will Continue to Blow The analysts’ trends provide a tailwind for the KMI market, with coverage increasing in 2024, the sentiment firming to Moderate Buy from Hold, and the consensus price target rising by 35%. The consensus in early 2025 lags the market, but revisions lead to the high-end range, which assumes a 10% upside from the mid-January price action. These trends are expected to continue in 2025, leading to even higher price points. The technical action in KMI stock is robust. The market is up 100% from its lows and looks strong in early 2025. The action at the end of 2024 and early 2025 amounts to a consolidation and continuation signal that could result in a $12 move from the breakout point. That gives a target of $40, which is near record high levels. 
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| Written by Gabriel Osorio-Mazilli 
Now that the first quarter of the new year is underway, investors might look for the best potential plays in the stock market. Having the confidence and financial momentum to start the year can give portfolios the room—and safety—to look for exposure to the more aggressive growth plays later in the year. But in order to get there, this strong start to the year needs to be locked in. Therefore, in order to get portfolios in that position, today’s list will be paramount for investors to consider for the first quarter. However, these are not the most popular names out there, and that is precisely where the underlying upside will come from, as the fundamental setups and risk-to-reward setups make these stocks some of the best picks in the transportation and industrial sectors. Once investors actually connect the dots in the big picture for shares of Knight-Swift Transportation Inc. (NYSE: KNX), the real estate investment trust (REIT) connection to the sector through Prologis Inc. (NYSE: PLD), and even the clean energy player in the energy sector in NextEra Energy Inc. (NYSE: NEE), the entire fundamental thesis behind today’s economy will lead them directly to the double-digit upside inside this list. Business Activity Boosts Lead to Knight-Swift Stock Now that the economy is starting to shift into a manufacturing-friendly environment, with the manufacturing PMI already showing investors a sudden surge in new orders and positive commentary from different industries, the view has turned positive for the industries that support domestic business activity. For example, transportation, as raw materials and finished goods are being transported, will create a significant demand tailwind for these operators to potentially see stronger profits in the coming months. If price action is any indication, investors already have a pillar of strength to account for in favor of Knight-Swift stock today. As it trades at 91% of its 52-week high, investors can safely assume that the market favors this stock for the reasons already mentioned. This might also explain why some Wall Street analysts have decided to reiterate their optimism in Knight-Swift stock today. Those at Susquehanna have placed a positive rating on this stock, this time valuing it as high as $67 a share to call for up to 21.4% upside from where the stock trades today, not to mention a new 52-week high. This also explains why allocators from Principal Financial Group also decided to boot their holdings by 21.5% as of January 2025 for a net position of $35.2 million today. Prologis Stock: Next in Line While Knight-Swift will handle the transportation responsibilities for this surge in business activity, Prologis will serve as the intermediary, focusing on logistics planning and storage networks. This is why the broader market is also willing to pay a price-to-earnings (P/E) ratio of 34.3x today, a premium over the finance sector’s average 24.8x valuation. Some will call this an expensive valuation and, therefore, unattractive. Others will realize that the market is always willing to pay a premium for stocks it expects to outperform its peers in the coming months. Knowing that the value chain, which already favors Knight-Swift, will fall into Prologis stock, new buyers have come around recently. As of January 2025, a new institutional allocation from Sarasin & Partners boosted the group’s holdings by 0.3%. While this may not sound like much on a percentage basis, it brought the net position to a high of $99 million today and gave investors another bullish factor to consider in their decision-making. Another benefit of owning this stock is the strong and stable cash flow it generates, which allows it to pay shareholders up to $3.84 a share in dividends, translating to an annualized dividend yield of up to 3.3% today. Oil Price Rallies Call for Clean Energy Low oil prices give very little incentive for consumers and businesses alike to look for alternative energy sources, which is why NextEra stock has traded down to 80% of its 52-week high. However, as business activity surges, demand for oil is also expected to rise under the most likely scenarios. This is a view shared by analysts at Goldman Sachs inside their 2025 macro outlook report, as well as hedge funds who have accumulated oil futures inventory lately. Connecting the dots in this last leg of the economic tailwind led Scotiabank analysts to reiterate a sector outperform rating as of December 2024. Not only that, the reiteration came with a valuation of up to $96 a share for Prologis stock, which would imply a net upside potential of as much as 35.5% from where the stock sits today. Understanding and accepting this potential upside led buyers from Bartlett & Co. to accumulate up to $55.9 million worth of NextEra socks to start the year. These factors give investors a chance to get their first quarter started on the right foot, a factor that institutions have already gotten behind on. Read This Story Online | |
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