The week of September 9 ended on a sour note after more Federal Reserve jawboning about the need for rate hikes ahead. Regardless of any market weakness, the reality is that the Dow Jones Industrial Average and the S&P 500 Index are still very close to all-time highs. Investors have demonstrated for more than five years now that they will buy every single market pullback. Those same investors are looking for new ideas for gains and income as well.
24/7 Wall St. reviews dozens of analyst research reports each morning of the week. This becomes hundreds of analyst calls reviewed per week. Some of these analyst reports feature stocks to buy, and sometimes they pertain to key upgrades and downgrades in blue chip stocks that are Dow stocks or that could be Dow stocks in the years ahead.
Investors should understand that traditional Dow stocks and most S&P 500 stocks are given implied upside of 8% to 15% by analysts at this stage of the bull market on their Buy and Outperform ratings. That is far from universal, but it is generally where we are now with the market so close to all-time highs.
As a reminder, analysts are not always right. Sometimes they are very wrong. Sometimes outside forces or unexpected company missteps also wreck a thesis. These are the top blue chip upgrades, downgrades and initiations tracked for the week of September 9.
Mixed Views on the Mighty Apple
After the iPhone 7 and Apple Watch refresh demonstrations this week, Apple Inc. (NASDAQ: AAPL) saw many analysts making calls on the stock. Credit Suisse featured it as a Focus List stock with massive upside at $150 that is way above consensus. Many other analysts opined with higher and lower price targets and ratings calls, and Wells Fargo was a key analyst downgrade.
Apple’s stock closed at $103.13 on Friday, down from almost $109 just a couple of days earlier. Apple’s consensus analyst price target is $123.66, and its 52-week trading range is $89.47 to $123.82.
Upgrades and Positive Initiations
Deutsche Bank started Caterpillar Inc. (NYSE: CAT) with a Buy rating early this past week. Shares closed at $82.08 ahead of the call, and it should be noted that Deutsche Bank’s call is after a huge run up based on hope and forecasts for 2017 and beyond.
Caterpillar has a 52-week range of $56.36 to $84.73, and the consensus target price of $72.56 at the time was up to $73.94 by the end of the week. Caterpillar remains the top performing Dow stock so far in 2016, up nearly 27%, if you factor in dividends.