The futures were trading mixed on Thursday, after a wild day on Wall Street to start off February. All the major indexes closed higher on Wednesday, after being down big early on. The big news on the day was of course the increase in the federal funds rate, which came in as expected at 25 basis points to put the rate at the highest level since 2007, 4.50% to 4.75%.
There were plenty of mixed opinions on the commentary, as some saw it to be very hawkish while others deemed it more dovish. One thing is for sure: the commentary mentioned future increases (plural), which likely means two more 25-basis-point increases, one in March and one in May, and then perhaps a pause. The worry for the bulls is that the pause could last well into 2024.
Treasury yields were down double-digits across the curve after the Fed decision. While the smaller increase was expected, it will not change the inversion between the 10-year note, which closed at 3.40%, and the shorter two-year note, which finished the day at 4.10%. The bond market and many economists using history as a guide maintain the ongoing inversions is a sign that a recession is on the way.
Both Brent and West Texas Intermediate crude were hammered Wednesday, down almost 3%. Analysts cited an inventory build for the selling Wednesday, even though OPEC maintained the production cut levels established back in November. Natural gas closed almost 7% lower, despite the bone-chilling weather across much of the United States. Gold closed the day up, while Bitcoin also finished higher, almost 3% to $23,759.50.
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 Thursday, February 2, 2023.
Advanced Micro Devices Inc. (NASDAQ: AMD): Craig Hallum downgraded the stock to Hold from Buy and has a $76 target price. The consensus target is $91.46. The stock’s $84.64 close on Wednesday was up close to 13% after strong results were posted.
Amazon.com Inc. (NASDAQ: AMZN) Oppenheimer reiterated an Outperform rating with a $130 target price. The consensus target is $136.32, and Wednesday’s closing share price was $105.15.
Amgen Inc. (NASDAQ: AMGN): Jefferies reiterated a Buy rating and has a $325 target price. The consensus target for the biotechnology heavyweight is just $269.53. Wednesday’s close was at $246.41.
Corning Inc. (NYSE: GLW): Oppenheimer stays with an Outperform rating for the legacy fiber optic leader and has a $43 price objective. The consensus target is $37.79. The stock closed on Wednesday at $35.28.
Dover Corp. (NYSE: DOV): Oppenheimer reiterated an Outperform rating and bumped its $164 target price up to $167. That compares with a $154.33 consensus target and Wednesday’s closing print of $156.60.
Edison International (NYSE: EIX): Wells Fargo downgraded the legacy utility to Equal Weight from Overweight. It also trimmed its $76 target price to $73, which is still above the $70.07 consensus target. The stock closed on Wednesday at $67.85.
Electronic Arts Inc. (NASDAQ: EA): As BofA Securities downgraded the video game giant to Neutral from Buy, it dropped its $155 target price to $130. The consensus target is $147.40. Wednesday’s $116.76 close was down almost 10% on the day in the wake of a fiscal third-quarter earnings miss.
Foot Locker Inc. (NYSE: FL): Credit Suisse upgraded shares of the retailer to Outperform from Neutral, and its $38 price target jumped all the way to $62. The consensus target is just $40.17. Wednesday’s close at $45.22 was up 4% for the day on the upgrade.
General Mills Inc. (NYSE: GIS): Mizuho initiated coverage with a Neutral rating and a $75 price target. The consensus target is $82.17, and the stock closed on Wednesday at $77.99.
Hasbro Inc. (NASDAQ: HAS): The Goldman Sachs downgrade was from Buy to Neutral with a $64 target price. The consensus target is $73.00, and the stock closed on Wednesday at $60.24.
HomeStreet Inc. (NASDAQ: HMST): Piper Sandler’s upgrade to Neutral from Underweight included a target price hike to $28 from $24. The consensus target is $27.75. The stock closed on Wednesday at $28.97, up over 5% for the day on the upgrade.
Hubbell Inc. (NYSE: HUBB): As J.P. Morgan raised its Underweight rating to Neutral, its $200 target price also increased to $205. The consensus target is higher at $236.88. The stock closed over 4% higher on Wednesday at $238.52.
Magna International Inc. (NYSE: MGA): BMO Capital Markets upgraded the stock to Outperform from Market Perform and lifted its $65 target price to $74. The consensus target is $71.50. The shares ended trading on Wednesday at $67.65, up over 4% on the day.
Mattel Corp. (NYSE: MAT): Goldman Sachs resumed coverage with a Buy rating and a $26 target price. The consensus target is $26.09. Wednesday’s final share price was $20.97.
NXP Semiconductors N.V. (NASDAQ: NXPI): Oppenheimer reiterated an Outperform rating with a $205 target price. The consensus target is $188.70. Solid fourth-quarter results boosted shares over 5% on Wednesday to close at $193.94.
Shopify Inc. (NYSE: SHOP): Scotiabank initiated coverage with a Sector Perform rating and a $43 target price. The consensus target is $42.59. The last trade on Wednesday was for $50.26 a share.
Snap Inc. (NYSE: SNAP): UBS downgraded the stock to Neutral from Buy and has a $10 target price. The consensus target is at $11.65 for now. The stock closed on Wednesday at $10.37, down over 10% on the day despite a fourth-quarter earnings beat.
Ternium S.A. (NYSE: TX): Citigroup resumed coverage with a Buy rating. Its $50 target price compares with a $45.64 consensus target and the most recent close at $40.78.
TransUnion Corp. (NYSE: TRU): As BofA Securities upgraded the stock to Buy from Neutral, its $72 target price rose to $91. The consensus target is $76.38. The shares closed on Wednesday at $74.21, which was up close to 4% for the day.
24/7 Wall St.Waste Management Inc. (NYSE: WM): Stifel reiterated a Hold rating with a $171 price target. The consensus target is $171.35. Wednesday’s close was at $154.41.
WinTrust Financial Corp. (NASDAQ: WTFC): Hovde’s upgrade was from Market Perform to Outperform with a $108 target. The consensus target is $108.09, and shares closed at $92.94 on Wednesday.
Woodward Inc. (NASDAQ: WWD): Alembic Global Advisors upgraded the stock to Overweight from Neutral. Its $111 target price rose to $127, even further from the $99.14 consensus target. Wednesday’s final trade was for $105.04 a share.
February typically is a so-so month for the stock market, and after a very solid January, it may make sense for growth and income investors to take some profits and move to big-dividend energy stocks.
Wednesday’s top analyst upgrades and downgrades included Alphabet, Bank of America, Dollar General, Edwards Lifesciences, Fortinet, Fox, Halliburton, LyondellBasell Industries, Paramount Global, SoFi Technologies and Truist Financial.
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