Markets were markedly higher to start Thursday, after Tesla reported higher-than-expected quarterly results, but afterward they turned much lower. In the previous session, Netflix earnings steered markets lower. While it could be any investor’s guess where markets will go next (based on whatever earnings) the current outlook appears to be optimistic. However, there is a different question going into this summer.
Earnings season so far has been good, but what happens when the Federal Reserve hikes interest rates, and then some. Right now, it is not off the table that the Fed would push a rate hike of 50 basis points. In fact, it seems more likely than not. But how does this play into corporate earnings?
At face value, a rate hike is good for stemming inflation, but in a broader sense it implies less spending, even on a consumer basis. So, consumer-facing businesses might be feeling a little more heat this summer when it comes down to it. All in all, it makes for a stock-picker’s market.
24/7 Wall St. is reviewing additional analyst calls seen on Thursday. We have included the latest call on each stock, as well as a recent trading history and the consensus targets among analysts. Note that analyst calls seen earlier in the day were on Block, Exxon, Haliburton, Peloton, Pinterest, Twitter and many more.
Alcoa Corp. (NYSE: AA): Citigroup downgraded the stock from Buy to Neutral with an $84 price target. The 52-week trading range is $31.00 to $98.09, and shares were trading near $74 on Thursday.
Carvana Co. (NYSE: CVNA): Evercore ISI downgraded the shares to In-Line from Outperform and cut the $155 price target to $110. The stock traded near $88 on Thursday. The 52-week trading range is $83.01 to $376.83.
Chevron Corp. (NYSE: CVX): Though RBC Capital Markets downgraded it to Sector Perform from Outperform, the analyst also raised the $160 price target to $165. The stock traded near $169 on Thursday. The 52-week trading range is $92.86 to $174.76.
Comerica Inc. (NYSE: CMA): The Raymond James downgrade was to Market Perform from Outperform. The 52-week trading range is $63.07 to $102.09, and shares traded near $84 apiece on Thursday.
M&T Bank Corp. (NYSE: MTB): Morgan Stanley upgraded the stock to Overweight from Underweight and raised the $179 price target to $238. The 52-week trading range is $128.46 to $186.95, and shares were trading near $179 apiece on Thursday.
NRG Energy Inc. (NYSE: NRG): The BofA Securities downgrade to Neutral from Buy included a price target cut to $43 from $47. Shares were trading near $41. The 52-week range is $31.94 to $46.10.
Scotts Miracle-Gro Co. (NYSE: SMG): Barclays downgraded the shares to Equal Weight from Overweight and cut the $150 price target to $110. Shares were near $111 on Thursday. The 52-week range is $110.58 to $247.84.
Sleep Number Corp. (NASDAQ: SNBR): Piper Sandler lowered its Overweight rating to Neutral and cut the $62 price target to $49. The stock traded near $47 on Thursday. The 52-week trading range is $43.28 to $121.98.
State Street Corp. (NYSE: STT): Argus upgraded it from Hold to Buy with a $93 price target. The stock traded near $76 on Thursday. The 52-week trading range is $72.40 to $104.87.
Perhaps the best tactic for investors for the rest of this year is to buy dividend blue chips, hold them and let the stock market find its footing. Five Warren Buffett holdings make sense now for worried growth and income investors.
The semiconductor industry has fallen sharply since a December peak. Analysts at Jefferies believe the bottom is near and that AMD, Marvell Technology, Nvidia and these other semiconductor stocks will be big winners.
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