The futures were higher to start the first full trading week for 2023, after last week’s holiday-shortened week. All the major indexes closed higher Friday on a huge risk-off rally day after the December nonfarm payrolls came in above estimates at 223,000, but below the “whisper number” of 240,000. In addition, the figures for both October and November payrolls were revised lower and wage growth cooled.
While the lower-than-expected print Friday was probably somewhat encouraging, the likelihood of the “higher for longer” mantra at the Federal Reserve will stay in place, and most think the increase of the federal funds rate at the end of the month will be 50 basis points, then a final 25 basis point hike in March to get to the terminal rate of 5.00% to 5.25%. All eyes this week will be on the December consumer price index data early Thursday.
Treasury yields plummeted on Friday, which was another huge tailwind for the equity markets. The yield on the five-year note dropped a stunning 20 basis points, while the 10-year dropped a remarkable 15 basis points. The yield on the two-year paper also dropped 20 basis points to close at 4.26%. While narrowing the inversion, it still suggests that recession is on the way.
Brent and West Texas Intermediate crude basically were unchanged on Friday, after surging higher initially when trading opened. Though recession worries and demand fears have kept a lid on benchmark pricing for months, some industry experts feel that if China’s economy fully recovers and the Covid restrictions are loosened or removed, oil could surge as high as $140 per barrel this year. Natural gas was flat after a horrible week. Gold and Bitcoin closed higher on the day.
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 Monday, January 9, 2023.
Bank of America Corp. (NYSE: BAC): Deutsche Bank downgraded the stock to Hold from Buy and cut its $45 price target to $36. The consensus target is $40.49. The stock closed last Friday at $34.41.
Bloom Energy Corp. (NYSE: BE): Wells Fargo cut its Overweight rating to Equal Weight and lowered its $27 price target to $22. The consensus target is $29.05. The shares ended Friday’s session at $19.03.
Boot Barn Holdings Inc. (NYSE: BOOT): BofA Securities started coverage with a Buy rating and an $85 price objective. The consensus target is $89.70. Friday’s close was at $61.99.
Chevron Corp. (NYSE: CVX): Though BofA Securities downgraded the shares to Neutral from Buy, its $190 price target ticked up to $191. The consensus target is $192.41. Friday’s close was at $176.56.
Constellation Brands Inc. (NYSE: STZ): Cowen’s downgrade to Market Perform from Outperform came with a price target reduction to $200 from $275. The consensus target is $271.26. Friday’s $214.23 close was up almost 3% on the day.
Coterra Energy Inc. (NYSE: CTRA): The Underperform rating at BofA Securities rose to Neutral, but the target price slipped to $29 from $30. The consensus target is $33.88. The stock closed on Friday at $24.26.
Doximity Inc. (NYSE: DOCS): Morgan Stanley’s downgrade to Underweight from Equal Weight included a target price adjustment to $29 from $32. The consensus target is $39.94 for now. The stock closed down almost 5% on Friday at $30.50 on no news except the downgrade.
Equifax Inc. (NYSE: EFX): Exane BNP Paribas started coverage with an Underperform rating and a $150 target price. The consensus target is up at $199.47. Friday’s close at $204.62 up over 3% on the day.
Lockheed Martin Corp. (NYSE: LMT): Vertical Research’s downgrade was from Buy to Hold with a $491 target price. The consensus target is $482.18. The last trade Friday came in at $473.24.
Lululemon Athletica Inc. (NASDAQ: LULU): As Wells Fargo upgraded the stock to Overweight from Equal Weight, it also boosted its $360 price target to $380. The consensus target is $396.44. The stock closed on Friday at $329.26.
MGM Resorts International (NYSE: MGM): Stifel upgraded the casino and gaming leader to Buy from Hold. It also lifted its $42 target price to $46, which is still less than the $50.24 consensus target. Friday’s close at $37.20 was up almost 6% on the day.
Molson Coors Brewing Inc. (NYSE: TAP): Cowen raised its Market Perform rating to Outperform, and its $55 target price increased to $60. The consensus target is $53.50. The stock was last seen on Friday trading at $50.88.
Northern Oil and Gas Inc. (NYSE: NOG): The BofA Securities upgrade was from Neutral to Buy with a $38 target price. The consensus target is $49.54. The last trade on Friday was for $29.55 a share, which was up close to 4% on the day.
Occidental Petroleum Corp. (NYSE: OXY): BofA Securities upgraded the shares to Buy from Neutral and has an $80 target price. The consensus target is $76.66. Friday’s close was at $63.75.
Penn Entertainment Inc. (NASDAQ: PENN): Stifel downgraded the gaming heavyweight to Hold from Buy. It also cut its $45 target price to $35, well below the $46.88 consensus target. The stock close on Friday at $30.32.
Radian Group Inc. (NYSE: RDN): The Barclays downgrade to Equal Weight from Overweight included a target price cut to $21 from $24. The consensus target is $24.63. The shares ended Friday trading at $18.71.
Signet Jewelers Ltd. (NYSE: SIG): Zacks named this as its Bull of the Day stock, citing its outperformance of the S&P 500 over the past three months. The stock last closed at $71.49, and the consensus price target of $83.33 represents more than 16% further upside potential.
Silvergate Capital Corp. (NYSE: SI): As Craig Hallum downgraded the stock to Hold from Buy, it slashed its $36 target price to $14. The consensus target is $42.00, for now. The shares closed on Friday at $12.24.
Skechers USA Inc. (NYSE: SKX): Argus upgraded the shares to Buy from Hold and has a $50 target price. The consensus target is $47.71. The stock closed over 3% higher on Friday at $44.59.
Snowflake Inc. (NYSE: SNOW): Wells Fargo initiated coverage with an Overweight rating and a $170 target price. That is less than the $194.18 consensus target, but Friday’s closing print was $124.06.
SunPower Corp. (NASDAQ: SPWR): Wells Fargo’s upgrade was to Equal Weight from Underweight. The $21 target price compares with a $21.58 consensus target and the most recent close at $17.13.
Sunrun Inc. (NASDAQ: RUN): Wells Fargo upgraded the stock to Overweight from Equal Weight, and it has a $32 price target. The consensus target is $21.58. The stock closed on Friday at $17.13.
24/7 Wall St.Ulta Beauty Inc. (NASDAQ: ULTA): Wells Fargo downgraded the popular cosmetic retailer to Underweight from Equal Weight and lowered its $450 price target to $400. The consensus target is up at $517.28. The stock closed on Friday at $486.19.
Voya Financial Inc. (NYSE: VOYA): J.P. Morgan upgraded the stock to Overweight from Neutral and bumped up the $75 target price to $77. The consensus target is $79.67, and Friday’s closing print of $65.96 was up close to 5% for the day, likely on the upgrade.
Waste Management Inc. (NYSE: WM): Citigroup initiated coverage with a Buy rating and a $183 target price. The consensus target is just $174.38. The stock closed almost 4% higher on Friday at $159.49, likely on the positive coverage.
Goldman Sachs is optimistic that energy stocks can outperform again this year. Seven large cap energy leaders offer worried investors some big and dependable dividends, and they have the highest total return potential.
Friday’s top analyst upgrades and downgrades included Ally Financial, American Express, AstraZeneca, Coinbase Global, Cognizant Technology Solutions, Comcast, CME, CrowdStrike, Delta Air Lines, Danaher, Dropbox, Marathon Oil, Microsoft and Target.
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