Are Earnings Actually Priced In? Analysts Upgrade or Downgrade Nike, Palantir and More

Markets dropped on Tuesday, with the Nasdaq leading the charge lower by retreating over 1%. The S&P 500 and Dow Jones industrials were down 0.5% and 0.2%, respectively. The drop in the Nasdaq was largely indicative of earnings warnings from major chipmakers Nvidia and Micron. However, this does raise questions about other companies reporting earnings.

Earnings season is well underway, and so far it has not been impressive. While July ended on a positive note for the broad markets, with the S&P 500 and Nasdaq notching 9% and 12% gains, respectively, earnings have fallen short across the board.

Despite earnings misses for most of these corporations, there has been relatively little price change as a result, according to data from FactSet. Ultimately, these stocks have not been punished for missing estimates, which suggests that markets may have to adjust their outlook going forward. In a sense, investors are going to see this play out in the price-to-earnings ratios for individual stocks and industries, and from the data so far this appears to be bottom-line driven.

Also be on the lookout for inflation data, as measured by the consumer price index, coming out on Wednesday morning. Consensus estimates are calling for 8.7% in July, after a 9.1% print for June.

24/7 Wall St. is reviewing additional analyst calls seen on Tuesday. 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 Alphabet, Amazon, DraftKings, Lululemon, Western Digital and more.

Bed Bath & Beyond Inc. (NASDAQ: BBBY): Robert Baird downgraded the stock to Underperform from Neutral and has a $4 price target. The 52-week trading range is $4.38 to $30.14, and shares traded near $12 apiece on Tuesday.

Clorox Co. (NYSE: CLX): Citing the grim picture that estimate revisions paint for the company in the short term, Zacks selected this as its Bear of the Day stock. Shares have traded as high as $186.86 in the past year but were near $143 on Tuesday, which is down more than 17% year to date.

CRISPR Therapeutics AG (NASDAQ: CRSP): The Barclays downgrade to Equal Weight from Overweight included a price target cut to $88 from $99. The 52-week trading range is $42.51 to $141.63. Shares changed hands near $77 apiece on Tuesday.

LivePerson Inc. (NASDAQ: LPSN): Loop Capital lowered tis Buy rating to Hold with a $15 price target. The 52-week trading range is $11.72 to $68.82, and the share price was near $14 Tuesday.

Nike Inc. (NYSE: NKE): Exane BNP Paribas downgraded the shares from Outperform to Neutral with a $118 price target. The 52-week trading range is $99.53 to $179.10. The stock traded near $111 on Tuesday.

Palantir Technologies Inc. (NYSE: PLTR): When Deutsche Bank downgraded the stock to Sell from Hold, it also cut its $11 price target to $8. The 52-week trading range is $6.44 to $29.29, and shares were trading near $9 on Tuesday.

Turtle Beach Corp. (NASDAQ: HEAR): Oppenheimer’s downgrade was to Perform from Outperform. The shares traded at around $9 on Tuesday. The 52-week range is $9.15 to $32.15 a share.

Tyson Foods Inc. (NYSE: TSN): Piper Sandler raised its Underweight rating to Neutral with a $79 price target. The stock traded near $81 on Tuesday, in a 52-week range of $74.43 to $100.72.

Winnebago Industries Inc. (NYSE: WGO): MKM Partners downgraded it to Neutral from Buy and has a $67 price target. The stock traded near $61 on Tuesday, in a 52-week range of $43.05 to $80.30.

The bear market rally has been a nice reprieve, but now is the time for investors to move to stocks that perform well during periods of stagflation. Seven top stocks are in the sectors that historically outperform during such periods and come with solid dividends.

Also, see which five Dow stocks may be value traps now.

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