Is Friday Another Dead Cat Bounce? Analysts Upgrade or Downgrade Carvana, First Solar, Ford, UPS, Waste Management and More

Investing

Published: May 13, 2022 11:28 am

Markets bounced back on Friday, but they are still on track to close out the week with a loss. The S&P 500 looks set to post its sixth straight week of losses, even withstanding a 2% gain on the day. Note that the Nasdaq saw a gain of roughly 3% on the day but was still facing another week of losses. Again, the bounce we are seeing is not enough to offset the losses from this week and it may mirror the sentiment that a recession may be on the horizon.

As we mentioned on Tuesday, this kind of bounce is akin to a “dead cat bounce.” The term was coined when someone suggested that if a cat fell from a great height (and even if it landed on its feet) it would bounce off the ground, still dead. They equated this to downtrends in the market. While investors are looking down the barrel of a recession, a few positive days here and there (like we saw on Tuesday and Friday) are just a bounce to eventually find the bottom.

Granted the term implies that markets are headed lower, but fundamentals suggest as much. Severe market headwinds from inflation, rising interest rates, geopolitical tensions and supply-chain issues are weighing heavily on the market.

24/7 Wall St. is reviewing additional analyst calls seen on Friday. We have included the latest call on each stock, as well as a recent trading history and the consensus targets among analysts. Note that analyst calls seen earlier in the day were on Boeing, Disney, IBM, Rivian, Roblox, Visa and more.

Atmos Energy Corp. (NYSE: ATO): Goldman Sachs downgraded the stock from Buy to Neutral with a $113 price target. The 52-week trading range is $85.80 to $122.96, and shares traded near $113 apiece on Friday.

Carvana Co. (NYSE: CVNA): The Jefferies downgrade to Hold from Buy included a price target cut to $40 from $150. The stock traded near $42 on Friday. The 52-week trading range is $28.35 to $376.83.

Duolingo Inc. (NASDAQ: DUOL): Raymond James raised its Market Perform rating to Outperform with a $98 price target. The 52-week trading range is $60.50 to $204.99, and shares traded near $90 apiece on Friday.

First Solar Inc. (NASDAQ: FSLR): Piper Sandler upgraded the shares to Overweight from Neutral and raised the $80 price target to $90. The 52-week trading range is $59.60 to $123.13, and shares were trading near $66 on Friday.

Ford Motor Co. (NYSE: F): Morgan Stanley’s upgrade was from Underweight to Equal Weight with a $13 price target. The stock traded near $13 on Friday, in a 52-week range of $11.62 to $25.87.

KB Home (NYSE: KBH): Wolfe Research downgraded the stock to Underperform from Peer Perform and has a $28 price target. The stock traded near $33 on Friday. The 52-week trading range is $30.13 to $50.20.

Krispy Kreme Inc. (NASDAQ: DNUT): HSBC Securities upgraded the shares from Hold to Buy with a $17 price target. The 52-week trading range is $11.98 to $21.69, and shares were trading near $14 on Friday.

Squarespace Inc. (NYSE: SQSP): Wedbush’s Neutral rating rose to Outperform. Shares were trading near $23, in a 52-week range is $14.43 to $64.71.

TuSimple Holdings Inc. (NASDAQ: TSP): RBC Capital Markets cut its Outperform rating to Sector Perform and reduced the $14 price target to $7. The 52-week trading range is $6.63 to $79.84, and shares traded near $8 apiece on Friday.

United Parcel Service Inc. (NYSE: UPS): J.P. Morgan downgraded it from Overweight to Neutral with a $202 price target. The stock traded near $178 on Friday, in a 52-week range of $173.19 to $233.72.

Waste Management Inc. (NYSE: WM): The BofA Securities upgrade to Neutral from Underperform included a price target hike to $165 from $155. The 52-week trading range is $136.97 to $170.18, and shares were trading near $158 on Friday.

Five Goldman Sachs Conviction List stock picks are ideas that aggressive investors with longer time horizons and a higher risk tolerance may want to consider, given the host of woes that continue to pressure the equity markets.

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