5 Stocks to Watch: Week of 1/20/2025
MPLX (NYSE: MPLX) expects stable profits. Penguin Solutions Inc. (NASDAQ: PENG) maintains a strong position in the AI infrastructure market. Amazon.com Inc. (NASDAQ: AMZN) gains analyst approval as an AI innovator.
MediaAlpha (NYSE: MAX) is our Stock of the Week, and a potential "buy the dip" opportunity. LPL Financial Holdings Inc. (NASDAQ: LPLA) is up already, but the momentum could continue. Here are our top watches for the week of 1/20/2025.
1- MPLX (NYSE: MPLX)
This company’s work might not be sexy — it’s a midstream energy company that gathers, processes, and transports natural gas, natural gas liquids, and crude oil — but despite challenges, analysts expect stable profits for the company and sector in 2025.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $50.81 — get current quote >
Max 1-year forecast: $55.00
Why we’re watching:
- Analyst support: The 6 analysts we track issuing ratings on MPLX give it a Strong Buy consensus, with a max 1-year forecast of $55.00. See the ratings
- Notably, Theresa Chen of Barclays (a top 5% analyst) raised their price target on MPLX from $49 to $52 this week, while maintaining a Strong Buy rating.
- Chen predicted stable profits for Midstreamers; however, they qualified that prediction by noting that the company's refining division may continue to face challenges.
- With an overall Zen Rating of B (Buy), MPLX is in a class of stocks that have beaten the S&P for the past 20 or so years; it shines with a particularly high Component Grade for Safety, our metric which gauges the predictability of earnings, cash flows, and operational metrics. (See all 7 Zen Component Grades here >)
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2- Penguin Solutions Inc. (NASDAQ: PENG)
With a strong position in the growing AI infrastructure market, strategic partnerships and noteworthy revenue growth, analysts are bullish on Penguin Solutions’ prospects for the coming year, even with a potentially “lumpy” market on the horizon.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $20.63 — get current quote >
Max 1-year forecast: $30.00
Why we’re watching:
- Right now, 7 analysts we track are issuing ratings on PENG. With 5 Strong Buy and 2 Buy ratings, there’s no ambiguity about how the pros view this tech company’s potential. See the ratings
- Notably, Tom O'Malley of Barclays (a top 18% analyst) raised their price target on PENG 4.5% from $22 to $23 following the company’s earnings report on 1/8, while maintaining a Strong Buy rating.
- O'Malley contextualized their price target hike by saying that "the resurgence of Penguin Solutions' major hyperscale customer, which is like Meta Planforms, for a third generation system should assuage fears about the company's path to continued growth for advanced computing."
- However, the analyst cautioned that near-term strength notwithstanding, management's reiterated guidance suggests a "lumpier" 2H 2025.
- Even so, O'Malley assured readers that "Penguin Solutions' qualitative indicators are all tracking significantly more positive, providing a stronger setup for a stock."
- But don’t just trust analysts. Our Zen Ratings system supports the thesis that PENG is watchlist-worthy, as it earns an overall B (Buy) rating. Stocks with a B rating have historically generated 19.88% annual returns.
- Highlights among the Component Grades that shape the overall score include above-average grades for Value and Growth, suggesting this stock may offer a unique opportunity to buy at an excellent price and potentially enjoy the benefits of its strong growth prospects. (See all 7 Zen Component Grades here >)
3- Amazon.com Inc. (NASDAQ: AMZN)
Amazon.com is already a household name, but here’s what you might not realize: It’s more than just e-commerce. Amazon is also at the forefront of generative AI, which has analysts watching the stock and has earned AMZN a Zen Rating of B (Buy). Here’s the story.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $223.86 — get current quote >
Max 1-year forecast: $290.00
Why we’re watching:
- 40 analysts we track currently issue ratings on AMZN; among them, the stock enjoys a Strong Buy consensus, with a max 1-year forecast of $290, which, if achieved, would represent over 32% upside. See the ratings
- One analyst issuing a Strong Buy rating is top 4% analyst Brian Nowak of Morgan Stanley, who just raised their price target on AMZN by 21.7% from $230 to $280.
- Hiking their price target on Amazon and naming the stock their new "Top Pick" among North American Internet names, Nowak said they believe the Street "largely appreciates AWS for its strong Gen AI position, but does not fully appreciate the company's Gen AI opportunities down the Retail P&L arising because Amazon is now incorporating improving matching/recommendation algorithms and shopping assistants, better inventory and logistics routing, robotics, diffusion-enabled advertising tools."
- Our Zen Ratings system agrees: AMZN is worth watching. It enjoys an overall B (Buy) rating, ranking in the top 89th percentile of all stocks we track.
- AMZN shines as a financially sound pick, with a Financials Rating in the 91st percentile — impressive for such a large company. It also has strong Component Grades for Growth, Momentum, and Sentiment. (See all 7 Zen Component Grades here >)
4- MediaAlpha (NYSE: MAX)
This innovative online partner to the insurance industry has enjoyed a period of explosive growth spanning its past 7 quarterly reports. The last 4 of which averaged a 109% surprise. Yet amazingly the most recent 76% beat led to a halving of the stock price.
Zen Rating: A (Strong Buy) — see full analysis >
Recent Price: $11.28 — get current quote >
Max 1-year forecast: $26.00
Why we’re watching:
- It’s our Stock of the Week: Our resident expert and Zen Investor Editor-in-Chief, Steve Reitmeister, recently chose MAX as this week’s Stock of the Week (See past picks here), noting it is a “sparkling example of the Zen Ratings. In this case, MediaAlpha (MAX) is not just an A overall...but even more impressive that it is in the top 1.2% of all stocks reviewed on the 115 different factors.” Among its high points, according to Reitmeister:
- Given the above earnings traditions you start to understand why the Growth rating is the strength of MAX in the 99th percentile. (actually top 0.3% of all stocks). This is not just about earnings growth rate…but the consistency of earnings growth across time and earnings, cash flow, profit margin, EBITDA, and yes, traditional earnings per share.
- Financial strength and growth typically go hand in hand thus not surprisingly that is also impressive in the 93rd percentile.
- Our AI factor, which is dialed into stocks ready to move now, is not too shabby at the 86th percentile.
- The last Zen Rating aspect to note is Value in the top 5% across the 21 factors of value we measure. (See all 7 Zen Component Grades here >)
5- LPL Financial Holdings Inc. (NASDAQ: LPLA)
This is the platform that financial pros use, offering an integrated platform of brokerage and investment advisory services to independent financial advisors. But financial advisors at financial institutions also make use of its services, giving it a big reach — and big potential.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $346.97 — get current quote >
Max 1-year forecast: $413.00
Why we’re watching:
- Analyst support: Among the 13 analysts we track issuing ratings on LPLA, it enjoys a resounding Strong Buy consensus (10 Strong Buy ratings, 2 Buy ratings, and 1 Hold). See the ratings
- Notably, Benjamin Budish of Barclays (a top 2% analyst) recently raised their price target on LPLA 0.3% from $378 to $379 on 1/13 in a Q4 2024 preview of names in their Brokers portfolio.
- Generally, trading activity and account development remained "robust," the analyst told investors, expressing overall optimism about all the names in the group, including LPLA, going into 2025.
- LPLA is also ranked in the 88th percentile of stocks we track, with an overall Zen Rating of B (Buy).
- Among the Component Grades that earn LPLA that spot, it’s parked in the 90th percentile for Momentum, meaning our proprietary system has identified LPLA as a stock on an upward trajectory that is likely to continue into the future. (See all 7 Zen Component Grades here >)
What to Do Next?
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