Friday’s tiny drop in the stock market might have ended the week on a slightly sour note, but the weekly gains were 1.8% for the Dow Jones Industrial Average and 1.6% for the S&P 500 Index. After the first six weeks of 2016 saw investors selling every rally, those same investors have unilaterally reverted back to the trend of the prior four years: buying every market dip.
24/7 Wall St. reviews dozens of analyst upgrades and downgrades each day of the week. This becomes hundreds of analyst calls each week. Some analyst calls cover stocks to buy, while others cover stocks to sell or avoid.
In an effort to find value for investors, 24/7 Wall St. noted several analyst calls seen last week in well-known stocks that stood out above and beyond the rest of the pack.
Most Dow and S&P stocks are given implied upside of 8% to 15% when analysts upgrade or initiate coverage with Buy, Outperform and Overweight ratings. Then there are other calls that can be much more aggressive.
Several analyst calls stuck out that either saved the week for stocks or that totally made the week for some stocks.
As a reminder, analysts issuing upside come with no assurances. Sometimes the situation changes unexpectedly, or sometimes the analysts just take the wrong view. It is very frequent that two analysts issue close to the same report after news and the only real difference at the end of the report is that one says to buy and one says to sell.
3D Systems — a New Street-High!
3D Systems Corp. (NYSE: DDD) saw a big whipsaw this past week. The 3D printing outfit received a stellar upgrade from Merrill Lynch on Thursday, having been raised in a double-notch upgrade to Buy from Underperform and with a new street-high $26.00 price target. Then on Friday, the research gods took back much of those gains after Citigroup decided the news was too good to be true and slashed its official rating to Sell from an already unenthusiastic Neutral.
Merrill Lynch’s call caused a 10.1% gain to $18.28, and Citi’s call took back 6.2% to close the week out at $17.15. The Merrill Lynch call said that 3D’s CEO announcement was a much needed catalyst to drive 3D’s turnaround through new strategy, alignment of cost structure and portfolio optimization.
the 3D Systems close of $17.15 on Friday was still a gain of 8.7% from the prior Friday’s closing price. 3D Systems has a consensus analyst price target of $14.55 and a 52-week trading range of $6.00 to $32.87.
Chipotle Mexican Grill — Feeling Less of a Burn!
Chipotle Mexican Grill Inc. (NYSE: CMG) was the beneficiary of a Thursday upgrade that helped to solidify gains for the week. The team at JPMorgan raised Chipotle to Overweight from Neutral and they assigned a $510 price target. This represented 15% upside from the prior $444.66 closing price.
Chipotle has been fighting to regain its good-guy image for fast-casual dining after being under pressure for months due to food contamination and questions that may not be fully answered yet.
Thursday’s upgrade took Chipotle shares up 2.55% to $456.01, and then the rally continued on Friday for a 2.9% gain to $469.29 — a gain of 4% versus the prior Friday’s close. Chipotle’s consensus analyst price target was about $477 going into the call, and it was closer to $479 at the end of the week. Its 52-week range is $399.14 to $758.61.