The week of June 3 was a wild ride that ended with a serious let down on the payrolls portion of the employment report. With the Dow closing out the week at 17,807, it ended up being almost a wash when compared to the prior week’s 17,873 close. Now the debate continues over whether “sell in May and go away” will be appropriate for 2016. After all, investors have proven on just about every occasion in 2016 that they will buy any big market pullback with a frenzy.
24/7 Wall St. reviews dozens of analyst research reports each day of the week. This ends up being hundreds of analyst calls each week. The point of these searches is to find new investing and trading ideas for our readers, or to find hidden gems that are overlooked elsewhere.
Some analyst reports cover stocks to buy, and other reports feature stocks to sell or avoid. When it comes to upgrades and Buy or Outperform ratings in major Dow or S&P 500 stocks, most analysts target upside of 8% to 15%. Sometimes, analysts call for much higher upside.
We have featured seven analyst upgrades or initiations with Buy and Outperform ratings for the week ending June 3. Details of each call have been included, along with consensus data and targets from Thomson/First Call, along with some additional color on each.
On June 3, Avon Products Inc. (NYSE: AVP) was started with a very rare Buy rating and was assigned a $7 price target at Jefferies. Avon closed at $4.01 prior to the call and closed up 4.7% at $4.20 on Friday. Despite the firm’s target matching the street-high analyst target, Avon’s trading volume was only average at about 6 million shares on Friday.
Avon’s consensus analyst price target was last seen at $4.82, and its 52-week trading range is $2.21 to $7.09. Jefferies is calling for 75% upside here, but it went further on a limb by saying that Avon shares could double by the end of 2017.
Avon was said to be early in a three-year transformation, and selling North American operations to Cerberus alleviates the cash worries. Its remaining international business is poised for greater growth with a very favorable risk/reward case.
Goldman Sachs raised Costco Wholesale Corp. (NASDAQ: COST) to Buy from Neutral on June 1. This call came with a $175 price target, versus a $148.77 close. Upside of 17% might not sound massive, but investors know that the retail sector as a whole has seen a rough 2016.
Costco had a consensus price target of $168.08 and a 52-week range of $117.03 to $169.73. Costco shares closed out at $151.71 on Friday.
What matters here is that Costco is believed to be able to withstand the pressure from Amazon because of its own strength and scope. Costco’s market cap is also $66 billion.