Markets turned lower to start out May. While April rained on markets with one of the worst performances in at least a couple of decades, a recovery does not appear to be in the picture near term. Concerns about whether a recession is on the way, or if we are already in one, are at the forefront of many investors’ minds.
Compounding with these recessionary concerns, the Federal Reserve is set to meet later this week, and most likely it will announce a hike in interest rates. Many are expecting the Fed to raise the federal funds rate by 50 basis points, a move in magnitude not seen since 2000. In a sense, this is admitting that the central bank printed too much money over the course of the pandemic.
Too much money chasing too few goods has led to inflation not rivaled in over 40 years. Some analysts previously argued that the markets would naturally bounce back as COVID-19 waned, and the trillion-dollar government spending bills were far too much and unnecessary at that. Initial statements by the Fed and the U.S. Department of Treasury when inflation was just picking up last year were in regards to its “transitory” nature, but it appears these were a grave miscalculation.
There is still some uncertainty about where the markets will go from here, as earnings season has held up despite the overwhelming market headwinds. However, these headwinds could prove to be too much, as gross domestic product growth turned negative for the first quarter. If they should persist, then the direction for the markets becomes unfortunately much clearer. All this makes for a real stock-picker’s market.
24/7 Wall St. is reviewing additional analyst calls seen on Monday. 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 Amazon, Apple, Caterpillar, Intel, McDonald’s and many more.
Accolade Inc. (NASDAQ: ACCD): Wells Fargo upgraded the stock to Equal Weight from Underweight and has a $6 price target. The 52-week trading range is $4.61 to $55.47, and shares traded near $6 apiece on Monday.
Bath & Body Works Inc. (NYSE: BBWI): Cowen upgraded the shares from Market Perform to Outperform with an $82 price target. The 52-week trading range is $44.17 to $82.00, and shares traded near $53 apiece on Monday.
CarMax Inc. (NYSE: KMX): Needham started coverage with a Hold rating. The stock traded near $86 on Monday. The 52-week trading range is $85.49 to $155.98.
Community Bank System Inc. (NYSE: CBU): Piper Sandler’s downgrade to Underweight from Neutral included a price target cut to $66 from $74. The 52-week trading range is $63.69 to $82.10, and shares were trading near $64 on Monday.
Empire State Realty Trust Inc. (NYSE: ESRT): Evercore ISI’s upgrade was to Outperform from In-Line and it has an $11 price target. The stock traded near $9 on Monday, in a 52-week range of $8.36 to $13.11.
KeyCorp. (NYSE: KEY): Piper Sandler lowered its Neutral rating to Underweight and cut the $23 price target to $20.50. Shares were trading near $19. The 52-week range is $17.90 to $27.17.
Mohawk Industries Inc. (NYSE: MHK): BofA Securities upgraded the stock to Neutral from Underperform and raised the $125 price target to $150. The 52-week trading range is $117.56 to $231.80, and shares traded near $143 apiece on Monday.
SJW Group (NYSE: SJW): J.P. Morgan upgraded it to Overweight from Neutral and has a $67 price target. The stock traded near $61 on Monday. The 52-week trading range is $58.50 to $73.69.
TAL Education Group (NYSE: TAL): J.P. Morgan raised its Underweight rating to Neutral but cut the price target to $3.90 from $7.60. The 52-week trading range is $1.60 to $58.50, and shares were trading near $3 on Monday.
Weyerhaeuser Co. (NYSE: WY): BMO Capital Markets downgraded the shares from Outperform to Market Perform with a $42 price target. Shares traded near $41 on Monday, in a 52-week range of $32.65 to $43.04.
With the potential for a sizable correction looming, 24/7 Wall St. thought it would be a good idea to look for Dividend Aristocrats that are in defensive sectors but look poised to do well the rest of 2022. Eight stocks fit the bill perfectly.
Top oil exploration and development companies are among those expected to lift the dividends they pay to shareholders this week, making their stocks good total return candidates.
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