The futures traded higher Wednesday. After a two-month wait, all of Wall Street expects the Federal Reserve to raise interest rates by 75 basis points. The horrific core inflation numbers last week sealed the deal. While the Fed does not meet again until early November, it is probably a given it will raise rates then and in December as well.
The major indexes closed lower Tuesday, as bond yields soared to some of the highest levels in 15 years. Toss in some red-hot inflation numbers out of Germany and Japan, and talk of the Fed’s terminal rate going higher for longer, and the risk-off crowd started hitting bids right from the open.
The aforementioned Treasury yields were up across the curve Tuesday, with the five-year and 10-year notes and the benchmark 30-year bond all trading at 52-week highs. The continued flattening of the curve and the two-year note closing at 3.97% keeps the dreaded inversion with the 10-year front and center. The inversion is considered a recession indicator.
Both Brent and West Texas Intermediate crude were down on the news that even more oil will be released from the Strategic Petroleum Reserve (SPR) over the next month or so. The SPR is now at the lowest level in decades. Some energy strategists warn that once the drawdowns end, we could be in for a severe shortage. Natural gas closed flat, while both gold and Bitcoin ended the session lower.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Wednesday, September 21, 2022
America Movil SAB de C.V. (NYSE: AMX): UBS upgraded the stock to Buy from Neutral but trimmed the $20.50 price target to $20.40. The consensus target is higher at $22.08. The stock closed over 4% higher on Tuesday at $17.42.
AutoZone Inc. (NYSE: AZO): Goldman Sachs reiterated a Buy rating and has a $2,334 target price. The consensus target is $2,292.89. The shares closed on Tuesday at $2,131.47.
AZZ Inc. (NYSE: AZZ): Stifel lowered its $62 price target to $54 while keeping a Buy rating. The consensus target is $53. The stock closed almost 3% lower on Tuesday at $39.33.
Brigham Minerals Inc. (NYSE: MNRL): Citing its solid growth and expanding margins, Zacks selected this holder of mineral and royalty interests as its Bull of the Day stock. Shares last closed at $26.52, and the $37.29 price target would be an all-time high.
Darden Restaurants Inc. (NYSE: DRI): Oppenheimer maintained an Outperform rating and a $155 price target. The consensus target is $139.83. The stock closed on Tuesday at $132.75.
EOG Resources Inc. (NYSE: EOG): KeyBanc Capital Markets initiated coverage with an Overweight rating and a $157 target price. The $148.43 consensus target is closer to Tuesday’s final print of $119.63.
Etsy Inc. (NASDAQ: ETSY): BofA Securities started coverage with a Neutral rating and a $120 price objective. The consensus target is $117.19. The stock on Tuesday at $103.97, down 7% on the day with the weak tape.
Humana Inc. (NYSE: HUM): As Morgan Stanley upgraded the stock to Overweight from Equal Weight, it boosted its $494 target price to $549. The consensus target for the healthcare giant is $541.48. Tuesday’s close was at $502.89.
Huntsman Corp. (NYSE: HUN): J.P. Morgan downgraded the stock to Underweight from Neutral. Its $25 target price is less than the $35.16 consensus target and near Tuesday’s close at $25.22.
Innoviz Technologies Ltd (NASDAQ: INVZ): J.P. Morgan started coverage with an Overweight rating and a $22 target. The consensus target is just $8.67. The shares closed on Tuesday at $5.78, up 4% for the day on the initiation.
Jazz Pharmaceuticals PLC (NASDAQ: JAZZ): Goldman Sachs slashed the $192 price target on the Neutral-rated shares to $148. The consensus target is $201.78. The stock closed down 7% at $137.84 on Tuesday.
Louisiana-Pacific Corp. (NYSE: LPX): The BofA Securities downgrade to Underperform from Neutral included a target price cut to $56 from $64. The consensus target is $70.22. The stock closed trading Tuesday at $52.44, a 4% drop for the day, likely on the downgrade.
24/7 Wall St.Luminar Technologies Inc. (NASDAQ: LAZR): J.P. Morgan initiated coverage with an Overweight rating and a $30 target. The consensus target is just $13.82. The stock closed on Tuesday at $9.53, up almost 5% for the day on the upgrade.
Martin Marietta Materials Inc. (NYSE: MLM): Exane BNP Paribas raised its Neutral rating to Outperform with a $407 price target. The consensus target is $410.63. The stock closed at $334.57 on Tuesday.
Nike Inc. (NYSE: NKE): Barclays downgraded the athletic shoe and apparel heavyweight to Equal Weight from Overweight. It also lowered its $125 target price to $110, well lower than the $131.08 consensus target. Tuesday’s closing print of $102.42 was a 5% drop on the day after the downgrade.
Norwegian Cruise Line Holdings Ltd. (NASDAQ: NCLH): Truist Financial upgraded the shares to Buy from Hold and slid its $18 target price up to $19, the same as the consensus target. Tuesday’s close was at $15.19.
Papa John’s International Inc. (NASDAQ: PZZA): Stifel kept a Buy rating on the popular pizza purveyor while lowering its $120 price objective to $100. The consensus target is $111.80, and Tuesday’s last trade was for $75.45 a share.
Parker-Hannifin Corp. (NYSE: PH): BofA Securities resumed coverage with a Neutral rating and a $315 target price. The consensus target is $325.69. The last trade for Tuesday was reported at $258.96.
PayPal Holdings Inc. (NASDAQ: PYPL): When Susquehanna lowered its Positive rating on the payments giant to Neutral, it also cut the $115 price objective to $100. The consensus target is $120.74. The $91.63 closed on Tuesday was down almost 4% on the day.
Pioneer Natural Resources Co. (NYSE: PXD): KeyBanc Capital Markets started covering the stock with an Overweight rating and a $290 target price. The $290.39 consensus target also is well above Tuesday’s last print of $231.74.
Vista Outdoor Inc. (NYSE: VSTO): Jefferies started coverage with a Hold rating and a $26 target. The consensus target is $48.97 for now. Tuesday’s close at $26.29 was down almost 7%, likely due to the weak tape.
24/7 Wall St.Western Digital Corp. (NASDAQ: WDC): Deutsche Bank downgraded shares of the hard-disk-drive giant to Hold from Buy, and it cut its $56 target price to $40. The consensus target is higher for now at $70. The stock closed Tuesday at $35.54, down 3% for the day.
Weyerhaeuser Co. (NYSE: WY): BofA Securities downgraded the stock to Neutral from Buy and trimmed the $38 price target to $34. The consensus target is $40.30. The stock closed on Tuesday at $29.82, down almost 6% after the downgrade.
Ziff Davis Inc (NASDAQ: ZD): Evercore ISI initiated coverage with an Outperform rating and a $90 target price. The consensus target is $109.71. The stock closed at $74.56 on Tuesday.
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.
Tuesday’s top analyst upgrades and downgrades included Adobe, Cheniere Energy, CNX Resources, Edwards Lifesciences, EOG Resources, Huntsman, Kraft Heinz, NCR, Peloton Interactive, PulteGroup, Take-Two Interactive Software and UDR.
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