The futures were higher on Monday, after a wretched week for stocks that was capped off Friday by a big risk-off session in which all the major indexes closed lower for the day and the holiday-shortened trading week. Once again, the trigger for the selling was an inflation reading known as the personal consumption expenditures index, which came in hotter than expected. Analysts were looking for an increase of 4.9% year-over-year, and many were stunned when the 5.4% print hit the tape. This is one of the top metrics used by Federal Reserve Chair Powell for policy decisions, and it all but assures more rate increases are on the way.
Yields across the Treasury curve jumped higher again, and this was more fuel for the selling fire on Friday. Both the five-year and 10-year paper yields jumped double digits, as the latter note closes in on the 4% level. The 3.95% close for the 10-year when compared with the two-year close at 4.81% (a 12 basis-point jump) keeps the inversion between the two maturities at the widest level in 42 years, and it signals recession could be on the way.
Brent and West Texas Intermediate crude both ended the week higher, and some on Wall Street cited the increase of U.S. sanctions on Russia as a tailwind for the benchmarks. Natural gas also had a strong day, finishing over 8% higher at $2.50. The combination of warm weather in much of the world and oversupply has crushed pricing over the past few months. Gold and Bitcoin both once again finished the day lower. The cryptocurrency dropped 3% on the day to close at $23,217 last week, after having pressed over the $25,000 level last Tuesday.
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, February 27, 2023.
Barings BDC Inc. (NYSE: BBDC): Oppenheimer downgraded the stock to Perform from Outperform and trimmed its $10 target price to $9. The consensus target is $10.61, and shares closed on Friday at $8.64.
Block Inc. (NYSE: SQ): Evercore ISI raised its Underperform rating to In Line and boosted its $51 target price all the way to $80. The consensus target is even higher at $92.23. The stock closed up over 4% on Friday at $77.37 after revenues beat estimates.
Booking Holdings Inc. (NASDAQ: BKNG): UBS reiterated a Buy rating and lifted its $2,785 target price to $2,900. Goldman Sachs reiterated a Neutral rating, and its $2,250 target increased to $2,630. Barclays maintained an Overweight rating, and it raised its $2,550 price objective to $2585. The consensus target is $2,463.93. Friday’s closing share price was $2452.48.
Broadcom Inc. (NASDAQ: AVGO): Oppenheimer reiterated an Outperform rating and has a $720 price target. The consensus target is just $655.64. Friday’s close was at $577.75.
California Resources Corp. (NYSE: CRC): BofA Securities upgraded the stock to Buy from Neutral. It also raised its $51 price target to $60, while the consensus target is $62.29. Friday’s close at $42.70 was up almost 8% for the day despite earnings that lagged estimates.
CarMax Inc. (NYSE: KMX): Zacks pointed to weak quarterly results and negative earnings estimate revisions as headwinds as it named this its Bear of the Day stock. Shares have traded as high as $109.54 in the past year but closed most recently at $67.86, after retreating about 7% last week.
Deere & Co. (NYSE: DE): This agriculture and construction equipment giant is the Zacks Bull of the Day stock. An improved earnings outlook signals green pastures ahead, suggests the analyst. The shares last closed at $417.42 apiece, and the $474.23 price target would be an all-time high.
Domino’s Pizza Inc. (NYSE: DPZ): As Citigroup downgraded the stock to Neutral from Buy, it chopped its target price to $316 from $429. UBS reiterated a Buy rating but cut its $410 target price to $370. Barclays reiterated an Underweight rating, and its $299 price target dropped to $270. The consensus target is $377.80 for now. Friday’s close at $297.47 was down over 3% for the day on the downgrades. The company reported lackluster sales and cut its revenue outlook as well.
Esperion Therapeutics Inc. (NASDAQ: ESPR): The upgrade at Jefferies was to Buy from Hold. The firm’s $12 target compares with an $11.05 consensus target. The stock closed over 6% higher on Friday at $6.20 after the upgrade.
Kratos Defense and Security Inc. (NASDAQ: KTOS): Canaccord Genuity’s upgrade to Buy from Hold included a target price hike to $14 from $11.50. The consensus target is $15.25. The stock closed on Friday at $12.98, up over 13% on the day, after posting solid quarterly results.
LyondellBasell Industries N.V. (NYSE: LYB): RBC Capital Markets upgraded the chemical heavyweight to Outperform from Sector Perform. Its $99 price objective was raised to $130, well above the $88.96 consensus target. Shares ended Friday trading at $96.69.
Marvell Technology Inc. (NASDAQ: MRVL): Oppenheimer reiterated an Outperform rating with a $70 target price. That compares with a $61.83 consensus and Friday’s close at $43.85, which was down over 3% on the day.
MGM Resorts International (NYSE: MGM): Barclays initiated coverage with an Overweight rating. Its $59 target price compares to the $53.24 consensus target and Friday’s closing print of $42.60.
Moderna Inc. (NASDAQ: MRNA): SVB Securities downgraded the vaccine maker to Underperform from Market Perform, and the analyst cut the $111 target price to $93. The consensus is up at $231.36 for now. The $139.26 close on Friday was down almost 6% on the day after reported earnings missed expectations.
NeoGenomics Inc. (NASDAQ: NEO): Benchmark’s upgrade was from Hold to Buy with a $20 price target. The consensus target is $18. The stock closed over 5% lower on Friday at $15.78 despite topping revenue estimates.
Newmont Corp. (NYSE: NEM): TD Securities upgraded the stock to Buy from Hold. Its $55 target price is less than the $73.48 consensus target. Friday’s close was at $43.54.
Upland Software Inc. (NASDAQ: UPLD): Roth MKM cut its Buy rating to Neutral and has an $8 target price. The consensus target is $13 for now. The shares closed on Friday at $6.02, a 31% one-day tumble after badly missing fourth-quarter estimates.
Valvoline Inc. (NYSE: VVV): Citigroup’s downgrade was from Buy to Neutral with a $37 target price. The consensus target is $39.33. The shares closed on Friday at $34.87.
Vicor Inc. (NASDAQ: VICR): Craig Hallum downgraded the stock to Hold from Buy, and it slashed its $70 price target to $45. The consensus target is $66 for now. The stock closed on Friday at $40.85, down almost 28% for the day after posting disappointing results.
Vipshop Holdings Ltd. (NASDAQ: VIPS): The Hold rating at Benchmark is now at Buy, and the firm’s $15 target price compares with a $14.49 consensus target and the latest close at $13.54.
WideOpenWest Inc. (NYSE: WOW): Raymond James cut its Strong Buy rating to Outperform and its $21 target price to $14. The consensus target is $16.94. Friday’s $11.84 closed was down close to 5% on the day after a reported fourth-quarter loss.
Wingstop Inc. (NASDAQ: WING): The BMO Capital Markets downgrade was from Outperform to Market Perform with a $190 target price. The consensus target is $183.24. Friday’s close was at $171.06.
W.W. Grainger Inc. (NYSE: GWW): When RBC Capital Markets raised its Underperform rating to Sector Perform, the price objective jumped to $679 from $502. The consensus target is even higher at $711.78. The shares closed on Friday at $664.10.
Yeti Holdings Inc. (NYSE: YETI): The Goldman Sachs downgrade to Neutral from Buy included a target price cut to $43 from $51. The consensus target is $51.20. The stock closed on Friday at $38.33.
Recent data indicate that inflation may be picking up steam again. Seven top Buy-rated stocks look like solid ideas now, as they come with dependable dividends and should continue to fare well as interest rates head even higher.
Friday’s top analyst upgrades and downgrades included AppLovin, CarMax, Cinemark, Diamondback Energy, Etsy, Graphic Packaging, Home Depot, Intel, Lucid, Nvidia, Teladoc Health, Walgreen Boots Alliance and Workday.
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