Stock Market Positive Tuesday, After a Negative Start to the Week

At 11:10 a.m. ET, U.S. markets are remain steady with technology and consumer discretionary stocks lifting the markets higher.

• S&P 500 Up 44.78 (.79%)
• NASDAQ Composite Up 228.66 (1.28%) 
• Dow Jones Industrial Average Up 43 (.10%) 
• Russell 2000 Index Up 3.17 (.15%) 

Wall Street Upgrades

McDonald’s (MCD) – Argus upgraded McDonald’s to Buy from Hold. The firm believes the company’s growth prospects are strong and anticipates continued success driven by McDonald’s operational efficiency, menu innovation, and global brand power.

Affirm (AFRM) – BTIG upgraded Affirm to Buy from Neutral with a $68 price target. The firm believes Affirm’s business model is well-positioned to capitalize on consumer demand for buy-now-pay-later services.

Philip Morris (PM) – Citi raised the price target for Philip Morris to $132 (up from $118.50), maintaining a Buy rating. Citi expects another quarter of strong performance in heated tobacco products and resilience in traditional combustibles.

Canadian Natural (CNQ) – Desjardins upgraded Canadian Natural to Buy from Hold. The firm cited the company’s solid risk/reward profile following recent share price performance, combined with credit rating upgrades and asset divestments.

Zscaler (ZS) – Exane BNP Paribas initiated coverage of Zscaler with a Neutral rating and a $180 price target. The firm believes Zscaler’s cybersecurity services are well-positioned, but the current valuation limits further upside.

Wall Street Downgrades

Bread Financial (BFH) – Barclays lowered the price target on Bread Financial to $35 (down from $37), maintaining an Underweight rating. The firm cited mixed credit improvement expectations for non-prime lenders and revised its fiscal 2025 estimates accordingly.

Qualcomm (QCOM) – KeyBanc downgraded Qualcomm to Sector Weight from Overweight. The firm believes that Qualcomm will not benefit from being viewed as an AI play in the short term, due to slow adoption in key markets like handsets and PCs.

Synaptics (SYNA) – KeyBanc downgraded Synaptics to Sector Weight from Overweight, noting limited growth catalysts in the company’s enterprise and automotive segments, which represent a significant portion of its revenue.

Constellation Brands (STZ) – TD Cowen downgraded Constellation Brands to Hold from Buy with a price target of $270 (down from $300). The firm highlighted decelerating growth in fiscal 2025 as a key reason for the downgrade, alongside broader pressures in the beer industry.

Molson Coors (TAP) – TD Cowen lowered the price target for Molson Coors to $56 (down from $58), maintaining a Hold rating. The firm sees downside risks due to weaker consumption trends and greater volume deleveraging.

AB InBev (BUD) – TD Cowen downgraded AB InBev to Hold from Buy with an unchanged price target of $68, citing valuation concerns and pressure on demand in the U.S. and China, limiting near-term upside.

Microsoft (MSFT) – Oppenheimer downgraded Microsoft to Perform from Outperform and removed its price target, citing concerns over consensus estimates for revenue and EPS being too high. The firm also highlighted potential losses from OpenAI, which could impact earnings growth in the coming fiscal years.

The S&P 500 opened Tuesday up 0.40%, making up for Monday’s 0.96% loss. As the market rebounds slightly, investors are keeping a close eye on how these upgrades and macroeconomic factors impact stock movements.

Altria Group (NYSE:MO): Citi raised its price target for Altria from $44.50 to $48, while maintaining a Neutral rating on the stock. The firm noted that the challenging environment for combustible tobacco products might weigh on Altria’s Q3 performance, leading to a lowered U.S. volume estimate. Despite this, Citi increased the price target due to a broader market shift toward defensive stocks. The firm also placed a 90-day negative catalyst watch on the shares, indicating potential short-term downside risks.

Humana (NYSE: HUM): Bernstein upgraded Humana to Outperform from Market Perform, setting a price target of $308. The firm cited improvements in the Medicare Advantage sector and reduced risks related to star ratings and repricing execution. Bernstein believes that with Humana’s lowered stock price and improved operating outlook, the company presents a strong investment opportunity.

American Express (NYSE:AXP): Barclays raised its price target for American Express from $223 to $250, keeping an Equal Weight rating ahead of the company’s Q3 earnings report. The firm highlighted positive delinquency trends among prime cardholders and expects this trend to continue through the second half of 2024. However, Barclays remains cautious about potential credit challenges in 2025 for non-prime lenders.