Friday’s stock market indexes were set to open higher ahead of many Federal Reserve comments, but China retaliated in the trade war by announcing new tariffs on $75 billion worth of U.S. goods, autos and auto parts. While this sell-off of 0.5% was sudden, it is important to consider that last week’s big one-day loss had been recaptured this week. Also worth noting is that the bull market remains 10 years old, and the Dow Jones industrials, S&P 500 and Nasdaq all remain up with double-digit percentage gains so far in 2019. Investors ought to be considering how to position portfolios and assets heading into late 2019 and as 2020 approaches.
24/7 Wall St. reviews dozens of analyst research reports each day of the week to find new ideas for traders and long-term investors alike. Some of the daily analyst calls cover stocks to buy, while some calls cover stocks to sell or to avoid.
We have provided these calls in a quick-hit summary for easy reading, and additional comments and trading data have been added on some of the calls. The consensus analyst price targets and other valuation metrics are from the Refinitiv (Thomson Reuters) sell-side research service.
These are the top analyst upgrades, downgrades and initiations on Friday, August 23, 2019.
Altria Group Inc. (NYSE: MO | MO Price Prediction) just hiked its dividend and has a monster yield after its share price has fallen and with it paying out 80% of normalized earnings as dividends. Morgan Stanley raised Altria to Equal Weight with a $44 price target.
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Apple Inc. (NASDAQ: AAPL) was maintained as Outperform with the same $245 price target at Wedbush Securities, with the firm discussing its upcoming streaming service as a first step in a broader strategy with a $6 billion commitment to original shows and movies for the launch of its Apple TV+.
BJ’s Wholesale Club Holdings Inc. (NYSE: BJ) closed up 17% at $26.42 after earnings beat expectations and it disclosed a very low exposure to China on its merchandise. UBS reiterated its Buy rating and raised the target price to $30 from $28.
Exxon Mobil Corp. (NYSE: XOM) was reiterated as Neutral at UBS, but the oil and gas giant’s target price was cut to $75 from $87. Credit Suisse reiterated its Neutral rating on Exxon, noting that the strength and positives coming from the Permian, Guyana and Carcara offshore Brazil were being overshadowed as three out of four of the company’s business segments are currently at the bottom of their cycles. Exxon shares were down 0.2% at $69.57 ahead of the call, and the consensus target price was $82.43 this week.
Gap Inc. (NYSE: GPS) had seen its shares rise 4.6% to $17.75 ahead of earnings, but it sees lower sales in 2019 and a challenging environment, and that put shares down almost 4% at $17.10 after the report. Wells Fargo reiterated it as Market Perform but cut the target price to $18 from $25. Credit Suisse reiterated its Neutral rating but lowered the target price to $20 from $23.
HP Inc. (NYSE: HPQ) was down 0.16% at $18.93 on Thursday but was indicated down 9% at $17.20 as the earnings disappointment also came with news that its CEO was departing. Barclays reiterated it as Equal Weight but cut the target price to $20 from $21. Citigroup reiterated its Hold rating and cut its target to $20 from $21, while Wells Fargo maintained its Market Perform rating and cut its target on HP to $20 from $23. Evercore ISI downgraded the stock to In-Line from Outperform and lowered its target price to $19 from $23.
Intut Inc. (NASDAQ: INTU) was down 0.2% at $275.71 ahead of earnings, but the post-earnings reaction had it up 4.1% at $287.00 on Friday morning. Stifel reiterated its Buy rating on Intuit and raised its target price to $315 from $290. Barclays reiterated its Equal Weight rating but raised its target price to $275 from $245. Credit Suisse reiterated its Outperform rating and raised its price target to $300 from $265, and UBS maintained its Neutral rating but still raised its target to $286 from $260.
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L Brands Inc. (NYSE: LB) was downgraded to Sector Perform from Outperform and the target price was cut to $22 from $30 at RBC Capital Markets. Morgan Stanley maintained its Equal Weight rating but lowered its target all the way to $18 from $34. L Brands saw its shares drop 3.5% to $19.33 on Thursday, and the stock was down another 4.1% at $18.55 on Friday.
LG Display Co. Ltd. (NYSE: LPL) was named as the Zacks Bear of the Day stock. The firm said that estimates have fallen but there still may be hope.
Macy’s Inc. (NYSE: M) was downgraded to Hold from Buy at Guggenheim. The retailer had a rough week after earnings, and the stock closed down at $15.56 on Thursday, in a 52-week range of $15.35 to $38.35.
MobileIron Inc. (NASDAQ: MOBL) was named as the Bull of the Day at Zacks, which said that this tech stock looks to be breaking out and will soon challenge new highs.
Nxt-ID Inc. (NASDAQ: NXTD) was downgraded to Hold from Buy at Maxim Group.
Ross Stores Inc. (NASDAQ: ROST) was up 1.6% at $107.40 ahead of earnings, but its shares were last seen down 4.2% at $102.90 after earnings with the disclosure that tariffs would impact the bottom line. Citigroup reiterated it as Neutral but raised the target price to $104 from $94. Deutsche Bank reiterated its Buy rating and raised its target to $113 from $107, and MKM Partners reiterated its Buy rating and raised its target to $114 from $102.
Salesforce.com Inc. (NYSE: CRM) was up 0.5% at $148.24 ahead of earnings, but yet another earnings beat sent shares up 6.5% to $158.00 after the report. Macquarie reiterated it as Outperform and raised the target to $190 from $185, while Morgan Stanley reiterated its Overweight rating and raised its target to $180 from $178. JMP Securities reiterated its Outperform target and raised its target to $191 from $178. Stifel reiterated its Buy rating and raised its target to $195 from $185, and BMO Capital Markets reiterated its Outperform rating and lifted its target price to $188 from $185.
Triumph Group Inc. (NYSE: TGI) was downgraded to Underweight from Equal Weight at Barclays. After closing up 0.7% at $22.65 on Thursday, it has a 52-week range of $11.16 to $26.00, and it had a consensus target price of $27.67.
VMware Inc. (NYSE: VMW) was maintained as Outperform and the target was cut to $190 from $210 at RBC Capital Markets. Stifel reiterated its Hold rating and cut its target to $150 from $160, while Barclays maintained its Overweight rating and marginally raised its target price up to $184 from $182. Nomura/Instinet reiterated its Reduce rating and slashed its target to $114 from $130.
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While no price target data was seen in early hours, Seaport Global issued new Buy ratings on homebuilders D.R. Horton Inc. (NYSE: DHI), KBHome (NYSE: KBH), Lennar Corp. (NYSE: LEN) and PulteGroup Inc. (NYSE: PHM).
While investors love defensive dividend stocks with dividends, the premium valuations on many of the go-to defensive to protect your stock portfolio have started to reach nosebleed levels and as such may not be as defensive the next time a serious sell-off, or worse, comes.
Thursday’s top analyst calls included Alibaba, Dillard’s, Home Depot, Jumia Technologies, Lowe’s Companies, Slack Technologies, Sociedad Quimica y Minera de Chile, Target, Wayfair and many more companies.
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