1 Stock to Buy, 1 Stock to Sell This Week: DoorDash, American Eagle
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• Trump’s trade war, inflation data, and last batch of earnings will be in focus this week.
• DoorDash’s imminent inclusion in the S&P 500 is likely to trigger a wave of buying that could propel its stock higher.
• American Eagle’s deteriorating earnings expectations and cautious outlook make it a stock to sell.
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U.S. stocks finished Friday’s volatile trading session in the green, but the major averages still suffered their worst weekly decline in several months amid a negative mix of news related to President Donald Trump’s trade war.
For the week, the 30-stock Dow Jones Industrial Average lost 2.4%, the S&P 500 sank 3.1%, and the tech-heavy Nasdaq Composite tumbled 3.5%.
Source: Investing.com
The week ahead is expected to be another eventful one as investors monitor fresh developments about Trump’s tariff decisions on imported goods from Canada, Mexico and China.
On the economic calendar, most important will be Wednesday’s U.S. consumer price inflation report for February, which could spark further turmoil if it comes in higher than expectations. The CPI data will be accompanied by the release of the latest figures on producer prices, which will help fill out the inflation picture.
Meanwhile, there will be no Fed speakers on the agenda as the central bank goes into its pre-FOMC blackout mode ahead of the March 18-19 policy meeting.
Source: Investing.com
Odds for Fed rate cuts have picked up considerably in recent days, as per the Investing.com Fed Monitor Tool, with the U.S. central bank now on track to cut interest rates three times this year.
And while the earnings season is drawing to a close, a few noteworthy reports loom in the coming week, including Oracle (NYSE:ORCL), Adobe (NASDAQ:ADBE), Kohl’s (NYSE:KSS), Dollar General (NYSE:DG), Dick’s Sporting Goods (F:DKS), and Ulta Beauty (NASDAQ:ULTA).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, March 10 - Friday, March 14.
DoorDash (NASDAQ:DASH) stands out as a compelling buy this week, as shares of the leading on-demand food delivery platform will be added to the key S&P 500 index as part of its quarterly reconstitution.
This announcement, made after Friday's market close, signals a new chapter for the company, as it will join the benchmark index before the start of trading on Monday, March 24. Historically, such inclusions have often led to a surge in stock prices.
Source: Investing.com
DASH ended Friday’s session at $178.08, the lowest closing price since January 17. The Palo Alto, California-based online food delivery company has a market cap of $74.8 billion. Shares are up 6.1% so far in 2025.
The inclusion in the S&P 500 is a testament to DoorDash's growth and stability. This move could lead to a substantial increase in buying of DoorDash’s stock, as index funds and other passive investment vehicles that track the S&P 500 will have to purchase shares to align with the benchmark’s composition.
The company has recently demonstrated strong operational performance, with analysts showing optimistic price targets. The most recent analyst coverage shows targets ranging from $175.00 to $235.00, with major firms like Truist Securities ($235.00), Barclays ($200.00), and Cantor Fitzgerald ($230.00) all maintaining positive outlooks.
Source: Investing.com
The consensus among analysts appears bullish, with most maintaining Buy or Overweight ratings, reflecting mounting confidence in DoorDash's growth trajectory and market position.
Furthermore, InvestingPro's AI-powered quantitative model rates DoorDash with a ‘GOOD’ Financial Health Score of 2.61, indicating a healthy profitability outlook and strong balance sheet.
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On the other hand, American Eagle (NYSE:AEO), a popular clothing and accessories retailer, is facing headwinds as it prepares to report its Q4 earnings after the market close on Wednesday at 4:05 PM ET amid a difficult retail landscape.
Market participants expect a sizable swing in AEO shares following the print, with the options market pointing to a possible implied move of 8.9% in either direction. Earnings have been catalysts for outsized swings in shares, with the stock tumbling over 11% when the company last reported earnings in December.
Source: InvestingPro
Analyst sentiment is overwhelmingly bearish with 10 downward revisions and no upward adjustments recorded in the weeks leading up to the report. This negative sentiment suggests that the market is bracing for a possible disappointment.
American Eagle is expected to deliver earnings per share of $0.51 for the fourth quarter, declining 16.4% from EPS of $0.61 in the year-ago period. Revenue is seen falling 5.9% year-over-year to $1.6 billion.
Looking ahead, the outlook for American Eagle appears dim as it struggles with a challenging economic backdrop characterized by elevated inflation and shrinking disposable income, leading to slower consumer demand for discretionary items, including clothing purchases.
As a result, investors might view American Eagle as a stock to sell, particularly in the face of mounting competitive pressures and cautious guidance on its future performance.
Source: Investing.com
AEO ended Friday’s session at $12.83, not far from a recent 52-week low of $11.65. At current valuations, the Pittsburgh-based clothing retailer has a market value of $2.5 billion. Shares, which are trading below their key moving averages, are down 23% year-to-date.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
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