The futures were lower after a sluggish start to the holiday-shortened trading week. All the major indexes closed in the red Tuesday, as investors and traders are quickly closing in on the end of the first half of 2023. Top Wall Street analysts have pointed out that the recent rally really has been a narrow melt-up of top technology stocks, especially those related to artificial intelligence. However, they also cite improving overall breadth in the market, some big-time short covering and, once again, as we saw during the pandemic trading, the FOMO or “fear of missing out” syndrome as factors that could push the rally a little higher.
Treasury yields were lower across the curve, as the buyers from last week returned to add bonds on Tuesday. While the Federal Reserve pause on rate hikes was viewed as a short-term positive, Fed Chair Powell has signaled that an additional 50-basis-point increase is likely on the way, and the terminal or final rate for federal funds will be in the 5.6% ballpark. The 10-year note closed on Tuesday at 3.73%, and the two-year note wrapped up the day at 4.68%, closing in on a 100 basis-point inversion difference.
Brent and West Texas Intermediate crude both finished the day lower, after some solid gains last week. Analysts cited higher than expected Russian exports, which come after the country had pledged to cut production by 500,000 barrels per day. With the Chinese attempting to jumpstart their economy by trimming rates and boosting refinery levels, many feel that the second half of the year could bring higher prices. Natural gas finished Tuesday at $2.50, down over 5% for the day.
Gold closed down over 1% to finish the day at $1,948. The bullion continues to consolidate the gains that were posted during the spring and into the summer. Bitcoin exploded higher in the afternoon to close up over 4% at $27,798.50.
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 Wednesday, June 21, 2023.
Allstate Corp. (NYSE: ALL): Morgan Stanley started coverage with an Equal Weight rating and a $117 target price. The consensus target is up at $135.15. The shares closed on Tuesday at $108.59.
Arch Capital Group Ltd. (NASDAQ: ACGL): Morgan Stanley started coverage with an Overweight rating and a $92 target. The consensus target is $84.25, and the shares closed on Tuesday at $70.79.
Archer Daniels Midland Co. (NYSE: ADM): Jefferies resumed coverage with a Hold rating and bumped its $82 target price up to $85. The consensus target is $96.99. The stock closed on Tuesday at $74.08.
Avis Budget Group Inc. (NASDAQ: CAR): Morgan Stanley raised its Equal Weight rating to Overweight and its $182 target price to $230. The consensus target is up at $241.75. Tuesday’s close at $224.14 was up almost 10% for the day on the upgrade and positive commentary.
Baidu Inc. (NASDAQ: BIDU): As Morgan Stanley upgraded the stock to Overweight from Equal Weight, its $160 target price increased to $190. The consensus target is $180.69. The shares closed on Tuesday at $143.52.
Ball Corp. (NYSE: BALL): Wells Fargo’s upgrade to Equal Weight from Underweight included a target price boost to $55 from $52. The consensus target is $60.42. The stock close over 3% lower on Tuesday at $51.34 despite the upgrade.
Biogen Inc. (NASDAQ: BIIB): Oppenheimer reiterated an Outperform rating with a $360 price objective. That compares with a $335.04 consensus target and Tuesday’s closing print of $293.79.
Centene Inc. (NYSE: CNC): UBS initiated coverage with a Neutral rating and a $72 price target. The consensus target is $84.51. The last trade on Tuesday came in at $65.94.
Chubb Ltd. (NYSE: CB): Morgan Stanley initiated coverage with an Equal Weight rating and a $192 target price. The consensus target is up at $240.97. The shares closed at $193.27 on Tuesday.
Entegris Inc. (NASDAQ: ENTG): BMO Capital Markets started coverage with an Outperform rating. Its $129 target price is well above the consensus target of $107 and Tuesday’s $107.33 closing share price.
EPR Properties (NYSE: EPR): JMP Securities raised the stock to Market Outperform from Market Perform and has a $54 target. The consensus target is $46.50. The shares closed on Tuesday at $45.13.
Globant S.A. (NYSE: GLOB): Jefferies reiterated a Buy rating with a $227 target price. That compares with a $205.30 consensus target and Tuesday’s final trade for $188.12 a share.
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Lemonade Inc. (NYSE: LMND): Morgan Stanley initiated coverage with an Underweight rating and a $14 target price. The consensus target is $16.21. Tuesday’s close at $18.13 was down almost 8% for the day on the downgrade.
ManpowerGroup Inc. (NYSE: MAN): Redburn started coverage with a Buy rating and a $94 target price. The consensus target is just $79.90, and the stock closed on Tuesday at $76.92.
Melco Resorts & Entertainment Ltd. (NASDAQ: MLCO): Credit Suisse’s upgrade to Outperform from Neutral came with a target price hike to $18 from $14.20. The consensus target is $15.47. The stock ended Tuesday’s session at $12.90, which was up 3% for the day on the upgrade.
Palantir Technologies Inc. (NYSE: PLTR): Though Raymond James raised its $15 target price to $18, its rating dropped to Outperform from Strong Buy. The consensus target is $9.98 for now. The stock closed on Tuesday at $15.79, down over 3% for the day on the very weak tape.
Peabody Energy Corp. (NYSE: BTU): Zacks selected this coal miner as its Bear of the Day stock, with the analyst pointing out that the big move in energy was last year. Shares have traded as high as $32.89 in the past year but closed most recently at $21.22. That is down more than 19% year to date.
Performance Food Group Co. (NYSE: PFGC): Morgan Staley downgraded the stock to Equal Weight from Overweight. The firm also cut its $74 target price to $66, well below the $71.83 consensus target. The shares closed on Tuesday at $54.83.
Philip Morris International (NYSE: PM): Citigroup lifted its Neutral rating to Buy and its $109 target price to $117. The consensus target is $112.88, and the stock closed at $94.82 on Tuesday.
Shopify Inc. (NYSE: SHOP): Oppenheimer citing improved profitability as it boosted its $70 target price on the Outperform-rated shares to $80. The consensus target is just $61.46, less than Tuesday’s close at $64.26.
Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE): Stifel reiterated a Buy rating. Its $131 target price towers over the consensus target of $91.42. The stock closed on Tuesday at $50.13, which was up close to 4% on the day.
US Foods Holding Corp. (NYSE: USFD): The Equal Weight rating at Morgan Stanley is now at Overweight. The analyst also raised its $46 target price to $54, above the consensus target of $48.09. The stock closed on Tuesday at $42.25.
Willis Tower Watson PLC (NASDAQ: WTW): Morgan Stanley started coverage with an Equal Weight rating and a $251 target price. The consensus target is $262.38. The shares closed on Tuesday at $232.64.
Zscaler Inc. (NASDAQ: ZS): Oppenheimer reiterated an Outperform rating. Its $180 target price is higher than the $173.91 consensus target. Tuesday’s $148.66 close was down almost 4% for the day.
This week, Darden Restaurants and Kroger are among the companies expected to lift the dividends they pay to shareholders, showing that they are doing well and have the earnings and cash flow strength to increase their payouts.
Tuesday’s top analyst upgrades and downgrades included Activision Blizzard, Adobe, Advanced Micro Devices, Ares Capital, Intel, Lennar, Marvell Technology, NexTier Oilfield Solutions, Nike, Nvidia, SoFi Technologies, Truist Financial, Tyson Foods and Zscaler.
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