The futures were trading higher on Wednesday after a dreadful start to the holiday-shortened trading week. All the major indexes were hammered on Tuesday. Extremely poor results and guidance from big-box retailers Walmart and Home Depot set the tone early, and some very worrisome geopolitical news later in the day stirred the pot even more. Chinese President Xi announced a summit with Vladimir Putin in Russia, as Putin rattled the nuclear saber once again while suspending Russia from the START nuclear arms treaty.
To compound things Tuesday in the ongoing inflation drama, Goldman Sachs said the Federal Reserve will hike the federal funds rate 75 basis points more on stronger growth, which, as we have noted recently, likely translates to 25-basis-point increases in March, May and July. Some on Wall Street feel that the terminal rate for federal funds could end up as high as 6%.
Treasury yields spiked much higher across the curve, which analysts also cited as a big reason for the equity weakness on Tuesday. The benchmark 30-year bond closed at a 3.98% yield, which is its highest level since late December. The inversion between the 10-year and the two-year notes widened yet again as well, with the former closing at 3.96% and the latter at 4.73%.
Brent and West Texas Intermediate crude both finished lower, with Brent down close to 2% on the day. While the recent backup in energy prices could tame inflation somewhat, many across Wall Street feel that prices will surge as the year goes on. Natural gas was crushed on Tuesday, closing down almost 9%. Gold finished the day flat, while Bitcoin closed down 2.25%, after a big run last week, to end the day at $24,252.
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, February 22, 2023.
Alliant Energy Corp. (NASDAQ: LNT): Guggenheim raised its Sell rating to Neutral and its $46 target price to $52. The consensus target is up at $57.50. Tuesday’s closing share price was $53.34.
Autodesk Inc. (NASDAQ: ADSK): Stifel lifted its $220 target price on the Buy-rated shares to $245. The consensus target is $234.22, and the stock closed on Tuesday at $215.55.
Autoliv Inc. (NYSE: ALV): BofA Securities resumed coverage with a Buy rating and a $130 price target. The consensus target is just $101.39, and shares ended Tuesday’s session at $90.21.
AutoNation Inc. (NYSE: AN): Though J.P. Morgan downgraded the stock to Underweight from Neutral, it also raised its $125 target price to $130. The consensus target is higher at $150.89. The stock closed Tuesday at $143.38, down close to 9% on the day, after posting inline results for the quarter last week.
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN): Citigroup initiated coverage with a Neutral rating and a $116 target price. The consensus target is up at $122.52. Tuesday’s close was at $105.97.
BJ’s Wholesale Club Holdings Inc. (NYSE: BJ): The strength of the U.S. consumer is helping this warehouse club retailer, says Zacks about its Bull of the Day stock. Shares last closed at $75.17, which is up more than 13% year to date.
BlackRock Inc. (NYSE: BLK): Jefferies reiterated a Buy rating with an $832 target price. The consensus target is just $788.15, and the shares closed on Tuesday at $695.75.
CF Industries Holdings Inc. (NYSE: CF): When HSBC Securities downgraded the stock to Reduce from Hold, it also reduced its $104 target price to $90. The consensus target is $107.21. The stock closed on Tuesday at $83.48.
Constellation Energy Corp. (NYSE: CEG): The Buy rating at BofA Securities has dropped to Neutral, and the analyst also lowered the $104 price objective to $88. The consensus target is $99.85. On Tuesday, the stock closed 5% lower at $80.37.
DocuSign Inc. (NASDAQ: DOCU): UBS’s downgrade was from Hold to Sell with a $52 target price. The consensus is up at $63.36 for now. Tuesday’s $59.61 close was down almost 8% for the day on the downgrade and the weak tape.
DraftKings Inc. (NASDAQ: DKNG): Oppenheimer reiterated an Outperform rating with a $28 target price. The consensus target is $23.60. The stock closed on Tuesday at $19.96.
Focus Financial Partners Inc. (NASDAQ: FOCS): RBC Capital Markets downgraded the stock to Sector Perform from Outperform. Its $53 target price is still above the $51.57 consensus target. Tuesday’s close was at $49.75.
Generac Inc. (NASDAQ: GNRC): The Truist Financial downgrade was from Buy to Hold with a $145 target. The consensus target is $143.61. The shares ended Tuesday trading at $111.77, down almost 9% on the day after multiple analyst downgrades.
MarineMax Inc. (NYSE: HZO): B. Reilly Securities upgraded the shares to Buy from Neutral, but the firm also trimmed its $53 target price to $52. The consensus target is just $38.50. Tuesday’s final trade was for $34.07 a share.
Mosaic Co. (NYSE: MOS): HSBC Securities downgraded the stock to Reduce from Hold, and it trimmed its $45 target price to $43, even farther from the $57.24 consensus target. Tuesday’s closing share price was $48.86.
Norfolk Southern Corp. (NYSE: NSC): Wolfe Research’s upgrade was from Peer Perform to Outperform with a $255 target price. The consensus for the railroad giant, which has been all over the news after the derailment in Ohio, is $251.24. The stock closed on Tuesday at $224.55.
Nvidia Corp. (NASDAQ: NVDA): Stifel raised its $175 target price on the Hold-rated chip giant to $207. That compares with the $207.34 consensus target and Tuesday’s closing print of $206.55.
Papa John’s International Inc. (NASDAQ: PZZA): Stifel reiterated a Buy rating with a $100 target price. The consensus target is $96.06. The stock closed over 4% lower on Tuesday at $90.96.
RE/MAX Holdings Inc. (NYSE: RMAX): Stephens downgraded the real estate giant to Equal Weight from Overweight. The analyst also dropped its $28 target price to $21, below the $23.40 consensus target. Tuesday’s $18.70 close was down over 5% for the day on the downgrade and last week’s inline earnings.
RingCentral Inc. (NYSE: RNG): Oppenheimer maintained an Outperform rating with a $50 target price. The $51.46 consensus target is a little higher, but Tuesday’s final trade was at $35.49, down 4% on the day.
Riot Platforms Inc. (NASDAQ: RIOT): Needham started coverage with a Buy rating and a $9 target price. The consensus target is $9.44. The stock closed on Tuesday at $6.22, down close to 6% for the day on the weak tape and the day’s big dip in Bitcoin.
24/7 Wall St.SentinelOne Inc. (NYSE: S): Wells Fargo downgraded the shares to Equal Weight from Overweight. Its $18 target price compares with the $21.34 consensus target and Tuesday’s close at $15.32.
Trustmark Corp. (NASDAQ: TRMK): Raymond James upgraded the stock from Market Perform to Outperform with a $34 target price. The consensus target is $32.00. The shares closed on Tuesday at $29.68.
TXO Energy Partners L.P. (NYSE: TXO): After its recent successful initial public offering, Capital One started coverage with an Overweight rating and a $35 target price. Raymond James started it at Strong Buy with a $34 target price, while Stifel initiated coverage with a Buy rating and a $31 target. The stock closed on Tuesday at $23.25, which was up close to 3% for the day on the positive Wall Street coverage.
The best strategy for worried investors now may be to move from riskier assets to dividend-paying stocks that can hold their ground if we slip into a recession, such as six top defensive picks from the Goldman Sachs Conviction List.
Tuesday’s top analyst upgrades and downgrades included Axalta Coating Systems, Canada Goose, Cisco Systems, Coca-Cola, Coinbase Global, Datadog, DraftKings, GE Healthcare Technologies, MongoDB, Monster Beverage, Roku, TechnipFMC, Toast, XP and Zim Integrated Shipping Services.
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