Markets started out Wednesday on a positive note, seemingly in anticipation of what the Federal Reserve would announce later in the day. Many are expecting the Fed to deliver a third-consecutive 75-basis-point hike, but it could be even more than that.
Analysts at Goldman Sachs previously called that the Fed would raise interest rates by a full 100 basis points, as inflation is not slowing fast enough, according to the most recent consumer price index report. Wells Fargo thinks that the Fed should just “rip the band aid off” and raise rates by 150 basis points.
There is an argument for going too high too fast, meaning there could be a disparate impact on the market that causes unnecessary pain. On the other hand, many economists think the fastest way out of this recession is to bite the bullet, drastically raise rates and then suffer in the near term. While this would crush markets, it provides a quicker runway out of recession. At this point, it is a balancing act and a tough question for the Fed.
Here, 24/7 Wall St. is reviewing additional analyst calls seen on Wednesday. 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 Etsy, Luminar, Nike, PayPal, Western Digital and more.
Aurora Cannabis Inc. (NASDAQ: ACB): Canaccord Genuity upgraded the stock to Hold from Sell. The shares traded near $1.30 on Wednesday. The 52-week range is $1.21 to $8.69.
Block Inc. (NYSE: SQ): SMBC Nikko cut its Outperform rating to Neutral and reduced the $120 price target to $70. The 52-week trading range is $56.01 to $270.16. Shares changed hands near $61 apiece on Wednesday.
Cisco Systems Inc. (NASDAQ: CSCO): Barclays lowered its Overweight rating to Equal Weight. The shares traded near $42 on Wednesday. The 52-week range is $40.82 to $64.29.
Datadog Inc. (NASDAQ: DDOG): Robert Baird resumed coverage with an Outperform rating and a $120 price target. Shares have traded as high as $199.68 in the past year but were near $96 on Wednesday, which is down about 47% year to date.
Micron Technology Inc. (NASDAQ: MU): Mizuho’s downgrade to Neutral from Buy included a price target cut to $56 from $76. Stifel initiated coverage with a Hold rating and a $56 price target. Shares traded near $52 on Wednesday, in a 52-week range of $49.73 to $98.45.
RH (NYSE: RH): William Blair resumed coverage with an Outperform rating, and it cut the price target to $21 from $28. The 52-week trading range is $207.37 to $708.58. The share price was near $257 on Wednesday.
Stitch Fix Inc. (NASDAQ: SFIX): Canaccord Genuity downgraded the stock from Buy to Hold with a $7 price target. The stock was last seen trading near $5, in a 52-week range of $4.40 to $44.65.
Given the looming potential for massive downside as interest rates head higher, seven Dividend Aristocrat stocks in defensive sectors that look poised to do well for the rest of 2022 and into next year make a ton of sense for nervous investors now.
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