The futures were higher on Thursday, after a rough day across Wall Street Wednesday as all the major indexes closed lower. That was due to a combination of less than stellar earnings and the fact that many analysts and strategists feel that there is a strong possibility that recession will take current forward estimates considerably lower. Add to the mix, continued massive tech layoffs, the prospect of more interest rate hikes, deteriorating financial conditions and inflation numbers that were trending down but could turn higher again as oil and other commodities spike.
Treasury yields were once again flat to modestly lower across the curve Wednesday, after a big spike to the upside over the past week. Short rates continue to dwarf the long end of the curve, as the two-year and 10-year inversion plainly shows. The short paper closed Wednesday at 4.43%, while the longer note ended the day at 3.65%. The 78-basis-point difference is the widest since 1981 and suggests recession is on the way.
Brent and West Texas Intermediate crude finished the day higher, both closing up almost 2%, following a big move earlier in the week. The U.S. Energy Information Administration confirmed a build of 2.4 million barrels in inventory. This came as an Iranian representative said oil could hit $100 per barrel in the latter half of 2023 if China’s demand returns. Natural gas closed the day down over 7% at $2.40. Gold closed slightly higher, while Bitcoin was down over 1% to close below $23,000.
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 9, 2023.
American Airlines Group Inc. (NASDAQ: AAL): Redburn upgraded the stock to Buy from Neutral and has a $25 target price. The consensus target is $16.57, lower than Wednesday’s close at $16.98 a share.
American Express Co. (NYSE: AXP): Morgan Stanley raised its Equal Weight rating to Overweight with a $186 target price. The consensus target is $183.75. The shares closed on Wednesday at $179.
AutoZone Inc. (NYSE: AZO): Barclays began coverage of the retailer with an Overweight rating and a $2,663 price objective. The consensus target is $2,634.20, and the stock closed at $2423.36 on Wednesday.
Best Buy Co. Inc. (NYSE: BBY): Barclays started coverage with an Equal Weight rating and a $88 target price. The consensus target is $83.87. The stock closed on Wednesday at $86.40.
Chesapeake Energy Corp. (NASDAQ: CHK): Citigroup started coverage with a Neutral rating and a $90 target price. The consensus target is up at $130.40. Wednesday’s close was at $81.98.
Delta Air Lines Inc. (NYSE: DAL): Redburn’s upgrade was from Neutral to Buy with a $55 target price. The consensus target is $51.00. The final trade on Wednesday was for $39.44 a share.
Discover Financial Services (NYSE: DFS): Morgan Stanley’s downgrade was from Overweight to Equal Weight with a $96 price objective. The consensus target is higher at $115.85. The stock closed on Wednesday at $115.60.
Dollar General Corp. (NYSE: DG): Barclays began coverage with an Equal Weight rating and a $237 target price. The consensus target is $264.92. The stock closed at $227.64 on Wednesday.
Duck Creek Technologies Inc. (NASDAQ: DCT): D.A. Davidson’s downgrade to Neutral from Buy included a target price cut to $19 from $22. The consensus target is $16.00. The stock closed on Wednesday at $18.80.
Enphase Energy Inc. (NASDAQ: ENPH): Oppenheimer maintained an Outperform rating and raised its $323 target price to $328. The consensus target is $300.21. The stock closed over 4% lower on Wednesday at $218.87. The company posted strong earnings.
Fortinet Inc. (NASDAQ: FTNT): Jefferies reiterated a Buy rating with a $70 target price. The consensus target is $64.03. Wednesday’s close at $59.64 was up almost 11% on the day following outstanding numbers for the quarter.
Goldman Sachs Group Inc. (NYSE: GS): Wells Fargo reiterated an Overweight rating and lifted its $390 target price to $420. The consensus target is $394.46. Wednesday’s close was at $375.10.
Hain Celestial Group Inc. (NASDAQ: HAIN): J.P. Morgan downgraded the stock to Neutral from Overweight. It also trimmed its $22 target price to $21, further from the $23.08 consensus target. The stock closed 10% lower on Wednesday at $19.02 after earnings beat estimates but sales dropped.
KKR & Co. Inc. (NYSE: KKR): Goldman Sachs lifted its $61 target price to $68 while keeping a Buy rating. The consensus target is $66.57. Wednesday’s last trade came in at $58.27.
24/7 Wall St.Lamb Weston Holdings Inc. (NYSE: LW): The Zacks Bull of the Day stock should do well regardless of whether a recession comes, says the analyst. Shares of the packaged foods company last closed at $98.99 apiece, and the $106.67 consensus price target would be a 52-week high.
Logitech International S.A. (NASDAQ: LOGI): Citing an earnings and revenue outlook trending in the wrong direction, Zacks selected this stock as its Bear of the Day. Shares have traded as high as $82.06 in the past year but closed most recently at $58.03. That is down almost 7% year to date.
Lululemon Athletica Inc. (NASDAQ: LULU): Oppenheimer reiterated an Outperform rating and has a $400 target price. The consensus target is $377.89. On Wednesday, the closing share price was $309.28.
Lumen Technologies Inc. (NYSE: LUMN): Citigroup downgraded the stock to Sell from Neutral and slashed its $6.25 target price to $3.50. The consensus target is $6.10 for now. Wednesday’s close at $3.95 was down 21% on the day after the company beat consensus estimates but gave dreadful forward guidance.
Micron Technology Inc. (NASDAQ: MU): Stifel raised its $52 price target to $55 while keeping a Hold rating. The consensus target is higher at $64.17. Wednesday’s $60.25 close was down 3% for the day.
Nutrien Ltd. (NYSE: NTR): TD Securities cut its Buy rating to Hold. Its $91 price objective is less than the $98.90 consensus target. Wednesday’s close at $78.17 was down almost 4% on the day.
Omnicom Group Inc. (NYSE: OMC): When Morgan Stanley upgraded the advertising behemoth to Equal Weight from Underweight, it hiked its $85 price target to $95. The consensus target is $83.30. The stock closed on Wednesday at $92.88.
Royal Caribbean Cruises Ltd. (NYSE: RCL): The BofA Securities upgrade was to Neutral from Underperform. The analyst raised the $40 price target to $78, well above the $69.29 consensus figure. The stock closed on Wednesday at $74.51.
TripAdvisor Inc. (NASDAQ: TRIP): As BofA Securities upgraded the stock to Buy from Underperform, it raised its $19 target price to $38. The consensus target is $24.33. The double upgrade had shares closing almost 4% higher on Wednesday at $25.09.
United Airlines Holdings Inc. (NASDAQ: UAL): The Sell rating at Redburn is now at Neutral, with a $55 target price. The consensus target is $57.38. Wednesday’s close was at $50.77.
United Rental Inc. (NYSE: URI): Credit Suisse initiated coverage with an Outperform rating. Its $544 target price compares with the $443.50 consensus target and Wednesday’s closing print of $458.04.
Walmart Inc. (NYSE: WMT): Barclays initiated coverage with a Buy rating and a $159 target price. The consensus target is $140.22. The stock closed Wednesday’s session at $140.22.
Wayfair Inc. (NYSE: W): Barclays upgraded the stock to Equal Weight from Underweight and has a $70 target. The consensus target is $52.52. Wednesday’s close was at $62.46.
Werner Enterprises Inc. (NASDAQ: WERN): Goldman Sachs boosted its $36 target price on the Sell-rated shares to $40. The consensus target is higher at $47.71. The stock closed on Wednesday at $47.90.
With all signs pointing to a looming recession, alternative assets are in demand. Six top gold stocks are rated Buy at BofA Securities and come with respectable dividends, making them great ideas now for worried investors.
Wednesday’s top analyst upgrades and downgrades included Alcoa, Cloudflare, Foot Locker, Fortinet, Lockheed Martin, On Semiconductor, Ovintiv, Pfizer, Take-Two Interactive Software, Tyson Foods and ZoomInfo Technologies.
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