Retail Dominates Friday’s Analyst Upgrades and Downgrades

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With stocks at record highs, investors have to be considering how they should be positioned. The Dow Jones Industrial Average was last seen over 20,200 and the S&P 500 was up at 2,310. These are huge milestones for the stock market. With the bull market now almost eight years old, the reality is that the major stock indexes have risen more than 200% from their inflection point lows of March 2009.

One prevailing trend that just will not go away is that investors have managed to find new reasons to buy every single sell-off. Those same investors are also looking for new and overlooked opportunities.

24/7 Wall St. reviews dozens of analyst reports each day of the week to find new investing and trading ideas for its readers. Some analyst reports cover stocks to buy, while other reports cover stocks to sell or avoid. What stood out for Friday, February 10, 2017, was that the analyst calls were dominated by the retail sector. Perhaps this is due to the proposed border adjustment tax looking dead on arrival, or perhaps there has been an inflection point where companies are finding their footing on how to deal with the online competition of brick and mortar.

Starbucks Corp. (NASDAQ: SBUX) may be more in coffee and food than it is in retail, but this giant was downgraded to Hold from Buy at Argus. Most downgrades from other analysts covering Starbucks were on valuation, but this call from Argus was based on a weaker sales outlook. Starbucks closed up 1% at $55.81 on Thursday, but after being indicated down 0.5% at $55.50 on Friday morning, it was up 0.3% at $55.97 in midday trading. Starbucks has a 52-week range of $50.84 to $61.64 and a consensus analyst price target of $64.56.

Wal-Mart Stores Inc. (NYSE: WMT) was started with a Positive rating and assigned an $80 price target by Susquehanna in a much broader retail segment call. Wal-Mart has a 52-week range of $62.35 to $75.19 and a consensus price target of $74.04.

Sears Holdings Corp. (NASDAQ: SHLD) may not look like it was the subject of a very cautious call because its shares soared on Friday. Sears shares were up over 40% at $7.95 in early trading indications, but the stock’s mid-Friday gain was up 30% at $7.25, after previously closing at $5.54. That huge gain was based more on a restructuring and cost/debt cut rather than based on actual earnings excitement. Sears was started as Negative with a $4 price target at Susquehanna, which is the equivalent of a Sell rating elsewhere.

J.C. Penney Co. Inc. (NYSE: JCP) was started with a Positive rating and assigned a $8.50 price target at Susquehanna. The shares closed up 1.3% at $7.07 on Thursday, but after being indicated up another 1.5% at $71.7 on Friday morning, this was down by 0.6% at $7.03 in mid-Friday’s trading session. J.C. Penney has a 52-week range of $6.35 to $11.99.

Friday’s full list of top analyst calls included other companies, like Ford, Intel, NVIDIA, Teva Pharmaceutical, Twitter, Alamos Gold, Fossil and others. More key analyst calls in the retail segment were seen as follows:

Bed Bath & Beyond Inc. (NYSE: BBBY) was maintained as Buy at Argus, but the firm lowered its price target to $50 from $55 (versus a $40.33 prior closing price).

Big Lots Inc. (NYSE: BIG) was started as Neutral with a $55 price target (versus a $52.97 prior close) at Susquehanna.

Costco Wholesale Corp. (NASDAQ: COST) was started with a Positive rating and assigned a $192 price target. Costco shares were up 0.5% at $171.80 midday on Friday, in a 52-week range of $138.57 to $171.87 and with a consensus price target of $175.46.

Dillard’s Inc. (NYSE: DDS) was started as Positive and given a $60 price target (versus a $57.29 close) at Susquehanna. Dillard’s was up 0.3% at $57.47 mid-Friday, versus a 52-week range of $53.61 to $88.58.

Kohl’s Corp. (NYSE: KSS) was started as Neutral with a $41 price target (versus a $42.10 close) at Susquehanna.

Macy’s Inc. (NYSE: M) was started as Neutral with a $31 price target (versus a $32.37 close) at Susquehanna. Macy’s was down 2.1% at $31.67 midday on Friday, perhaps with this unenthusiastic rating not driving much hope for a merger.

Nordstrom Inc. (NYSE: JWN) was started as Neutral with a $47 price target (versus a $45.55 close) at Susquehanna. Its shares were last seen down 2.8% at $44.36 in mid-Friday trading. The 52-week range is $35.01 to $62.82.

Target Corp. (NYSE: TGT) was started with a Neutral rating at Susquehanna. Its $70 price target compares with a previous close of $66.41, and Target shares were down 1.5% at $65.41 on Friday. The 52-week range is $62.94 to $84.14, and the consensus target price is $84.14.

TJX Companies Inc. (NYSE: TJX) was up 0.1% at $76.22 midday, after Susquehanna started it as Positive with a $92 price target.

Elsewhere in analyst research, Merrill Lynch has four Buy-rated stocks yielding 8% or more. There are also five safe strong dividends for investors if that elusive market sell-off ever comes to pass.