The futures traded higher, and what a difference a day makes. After opening the week with solid gains Monday, the stock market was pounded on Tuesday and all the major indexes closed lower after a shocking (to some) downgrade of small and medium-sized banks by rating agency Moody’s. In another stunning move, numerous large-cap industry giants like Bank of New York Mellon, U.S. Bancorp and State Street were all put on negative review status by Moody’s and could be downgraded in the future.
Once again the fear of contagion in the banking system has been reignited, and with the potential for more economic worries if inflation comes in hotter than expected tomorrow, we could be in for some rough sailing.
Treasury yields were down across the curve as the lure of safe-haven government debt had buyers showing up right from the open. The biggest buying was in the longer maturities, as the 10-year note closed at 4.02% and the 30-year long bond at 4.21%, with both yields dropping by five basis points. The two-year paper closed unchanged at 4.76%, as the inversion widened some Tuesday.
Brent and West Texas Intermediate crude bucked the selling trend like Treasuries, as both closed higher after industry reports indicated that crude inventories will sink to an eight-year low by the end of this year. Continued demand plus the falling inventories have analysts feeling that the $80 level could prove to be strong support. Brent closed the day at $86 a barrel, while WTI finished the session at $82.67. Natural gas also closed higher at $2.78, up 2% on the day.
Gold was also a loser Tuesday, despite Russia announcing it was restarting its gold and currency purchasing again to the tune of $19 million per day. In addition, China continues to buy the bullion in its efforts to challenge the U.S. dollar as the world’s reserve currency. The December contract closed at $1,958.90, down 0.56%. Bitcoin was a big winner on the day, closing up 2.65% at $29,954.30.
24/7 Wall St. reviews dozens of analyst research reports each weekday 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 Wall Street analyst upgrades, downgrades and initiations seen on Wednesday, August 9, 2023.
Alteryx Inc. (NYSE: AYX): Loop Capital’s downgrade to Hold from Buy included a target price cut to $35 from $60. The consensus target is $67.51 for now. The stock closed down 18% on Tuesday at $30.87 after report of a second-quarter loss.
Amazon.com Inc. (NASDAQ: AMZN): Zacks has selected this as its Bull of the Day stock, making a case that it is a strong buy once more. Shares last closed at $139.94, and the $152.15 consensus price target would be a 52-week high.
Beyond Meat Inc. (NASDAQ: BYND): Goldman Sachs lowered its $5 target price on the Sell-rated shares to $4.50. The consensus target is $10.55 for now. Tuesday’s close at $13.10 was down 14% for the day after forward guidance was slashed.
Compass Inc. (NYSE: COMP): Oppenheimer bumped its $5 target price to $6 while maintaining an Outperform rating. The consensus target is $4.09 and Tuesday’s closing print was $3.85.
DraftKings Inc. (NASDAQ: DKNG): Truist Financial raised its Hold rating to Buy and its $31 target price to $44. The consensus target is $31.78. The stock closed on Tuesday at $31.71.
Freshpet Inc. (NASDAQ: FRPT): Although J.P. Morgan downgraded the stock to Neutral from Overweight, its $78 target price increased to $84. The consensus target is $83.69. The shares closed down 3% on Tuesday at $80.00.
Genius Sports Ltd. (NYSE: GENI): Oppenheimer maintained an Outperform rating and boosted its $7 target price to $10. The consensus target is $8.83, and the shares closed on Tuesday at $6.75.
Home Depot Inc. (NYSE: HD): Telsey Advisory downgraded the shares from Outperform to Market Perform. Its $315 target price is less than the $320.11 consensus target and Tuesday’s close at $327.85.
Inogen Inc. (NASDAQ: INGN): J.P. Morgan’s downgrade to Neutral from Overweight came with a target price cut to $8 from $15. The consensus target is $15.00 for now. The shares closed almost 14% lower on Tuesday at $6.48. The company reported a second-quarter loss and missed revenue estimates.
International Flavors & Fragrances Inc. (NYSE: IFF): Societe Generale downgraded the stock from Buy to Hold with an $80 target price. The consensus target is $105.90 for now. Tuesday’s $64.77 close was down 20% on the day, after its full-year sales guidance was slashed.
Lowe’s Companies Inc. (NYSE: LOW): Telsey Advisory downgraded the stock from Outperform to Market Perform and has a $225 target price. The consensus target is $236.77. The stock closed on Tuesday at $220.92.
National Storage Affiliates Trust (NYSE: NSA): Stifel cut its Buy rating to Hold and its $47 target price to $35. The consensus target is $40.75. Tuesday’s close was at $32.05.
NovoCure Ltd. (NASDAQ: NVCR): Piper Sandler upgraded the shares to Overweight from Neutral and has a $45 target price. The consensus target is way up at $80.29, and Tuesday’s close was at $27.64.
Palantir Technologies Inc. (NYSE: PLTR): Goldman Sachs raised its $10 price target on the Neutral-rated shares to $11. The consensus target is $12.82. The stock closed on Tuesday at $17.04
RingCentral Inc. (NYSE: RNG): Craig Hallum downgraded the stock from Buy to Hold with a $38 target price. The consensus target is higher at $46.75 for now. Shares tumbled 18% on Tuesday to close at $31.81. Though it topped estimates, guidance was disappointing.
Sage Therapeutics Inc. (NASDAQ: SAGE): Goldman Sachs downgraded the stock from Buy to Neutral with a $22 target price. The consensus target is $40.76 for now. Tuesday’s $18.93 close was a one-day gain of 13% gain, a recovery from after a stunning drop on Monday when the FDA rejected a treatment for major depressive disorder from Sage and its partner Biogen.
Skyworks Solutions Inc. (NASDAQ: SWKS): Stifel reiterated a Buy rating and has a $130 target price. The $120.20 consensus target is closer to Tuesday’s close at $108.76.
Telephone and Data Systems Inc. (NYSE: TDS): J.P. Morgan upgraded the stock from Neutral to Overweight and has a $38 target price. The consensus target is just $15.50. Tuesday’s $17.00 closing share price was up 29% on the potential for the U.S. Cellular transaction.
United States Cellular Corp. (NYSE: USM): J.P. Morgan upgraded the stock from Neutral to Overweight. Its $52 target price towers over the $24 consensus target. Shares ended Tuesday 23% higher at $38.43 despite earnings that missed estimates. Growth in tower revenue was cited for the big move, and the fact that executives are shopping the company was a massive lift.
Walmart Inc. (NYSE: WMT): Oppenheimer reiterated an Outperform rating. Its $175 target price compares with the $171.44 consensus target and Tuesday’s closing print of $160.65.
Westlake Corp. (NYSE: WLK): When J.P. Morgan downgraded the shares to Underweight from Neutral, its $120 target price rose to $123. The consensus target is $118.13. The stock closed on Tuesday at $132.59.
Willis Towers Watson PLC (NYSE: WTW): The BMO Capital Markets downgrade to Underperform from Market Perform included a target price cut to $205 from $230. The consensus target is $248.41 for now. Tuesday’s $203.44 close down almost 4% for the day on the downgrade.
Moody’s has downgraded a number of smaller and regional banks, but five mega-cap financial giants will likely weather the storm. They have the most assets, posted stellar second-quarter results and pay dependable dividends.
Tuesday’s top analyst upgrades and downgrades included Cloudflare, Datadog, Dish Network, DraftKings, Fortinet, MGM Resorts, PG&E, Rocket Companies, Southwest Airlines, United Airlines, Wayfair and XPO.
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