The week of March 22, 2019, ended on a very sour note with the Dow Jones industrials selling off on Friday alone by a sharp 460 points and the S&P 500 down 54 points. Despite Fed Chair Jerome Powell surrendering in his war of hiking interest rates, the economic weakness seen in reports and the newly inverted yield curve weighed heavily on a market that was already in serious need of a breather. That said, there are always some stocks that manage to rise in hard times.
Blue chips and industry leaders are often those leaders, at the expense of industry laggards and companies with business plans that are afterthoughts of their larger companies.
24/7 Wall St. reviews dozens of analyst upgrades, downgrades and initiations each day of the week. This ends up being hundreds of analyst calls each week that get reviewed. Some of these calls are on blue chip stocks, industry leaders and Dow stocks, and some prove to be rather defensive stocks by nature. To prove the point, some of them even saw their shares rally despite the selling pressure late in the week.
During the week of March 22, we tracked seven standout analyst calls in these blue chips and industry leaders in which analysts were telling their clients to buy the shares regardless of the current stock market woes and regardless of the Fed backing away from the rate-hike machine, causing an inverted yield curve in U.S. Treasury interest rates.
Most analyst upgrades and reiterations come with implied upside of 8% to 10% in a total return projection at this stage of the 10-year old bull market.
Here are seven of the blue chip and industry leaders calls that stood out, above and beyond the rest of the pack, this last week.
Apple Inc. (NASDAQ: AAPL) was reiterated as Outperform and the price target was raised to $215 from $200 at Wedbush Securities, with the firm seeing its streaming service adding over $60 billion dollars in shareholder value at current prices. Needham was even offering a stronger upside, raising its Buy rating to Strong Buy and raising its target to $225 from $180.
Apple closed up 0.87% at $188.16 a share ahead of the call, but it closed out the week at $191.05, after giving back 2% during Friday’s sell-off. Its 52-week trading range is $142.00 to $233.47, and its consensus target price was $180.85 on last look.
Best Buy Co. Inc. (NYSE: BBY) was raised to Outperform from Perform with an $86 price target at Oppenheimer, and its shares had closed up 2.1% at $70.56 ahead of the call. This is the independent leader of consumer electronics and home goods, and it has managed to withstand the pressure from Amazon and other online retailers over the years. This represents almost 25% total return opportunity if you include the dividend, assuming Oppenheimer is correct.
After being indicated up another 1.5% at $71.60 early on Friday, Best Buy shares closed down 0.6% at $70.11 on Friday. The consensus target price is $76.64, and the 52-week trading range is $47.72 to $84.37.
Eli Lilly & Co. (NYSE: LLY) was started with a Buy rating and assigned a $140 price target (versus a $126.59 prior close) at UBS. The 52-week range is $74.51 to $130.75, and the consensus analyst target is $122.00. UBS sees Eli Lilly as stronger after the Elanco Animal Health exit is complete and with a few other positive catalysts coming down the pipe.