Is the Labor Market Too Much of a Good Thing? Analysts Upgrade or Downgrade Comcast, Rivian, T-Mobile and More

Investing

Published: June 2, 2022 11:50 am

Markets turned lower to start out Thursday, with each of the major averages posting a loss. However, the Nasdaq was proving to be the most resilient of the group. The labor market is proving to be a bright spot despite this ongoing downturn.

The weekly jobless claims from the U.S. Department of Labor came in at 200,000, a decrease of 11,000 from the previous week, and also compared with the consensus estimate of 210,000. Continuing claims fell to 1.31 million for the week of May 21 (this number is reported two weeks after the fact), which is also the lowest since 1969.

Overall, this report demonstrates strength and tightness within the labor market. And while layoffs are near record lows, inflation is definitely a contributing factor to this. However, the direction the labor market is headed may not necessarily be a good thing.

Obviously, the strength in the labor market is a good sign of recovery, but like most things, there must be a balance—there is such a thing as too much of a good thing. So as unemployment continues lower, it is basically signaling that demand for jobs is increasing. Some economists speculate that this increase in demand for jobs is such that consumers need to make more money to afford these historic levels of inflation. Economically speaking, once this reaches dire levels of demand, we could be in for more trouble.

24/7 Wall St. is reviewing additional analyst calls seen on Thursday. 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 Ford, Pinterest, Salesforce, Snap, Tesla and more.

Bloom Energy Corp. (NYSE: BE): KeyBanc Capital Markets resumed coverage with an Overweight rating and a $30 price target. The 52-week trading range is $11.47 to $37.01, and shares traded above $18 apiece on Thursday.

Comcast Corp. (NASDAQ: CMCSA): Wolfe Research downgraded the stock to Peer Perform from Outperform and cut the $63 price target to $50. The stock traded near $43 on Thursday, in a 52-week range of $39.47 to $61.80.

Fox Corp. (NASDAQ: FOXA): Wolfe Research’s downgrade to Peer Perform from Outperform included a price target cut to $39 from $52. Shares were trading near $34, in a 52-week range is $31.35 to $44.95.

FuelCell Energy Inc. (NASDAQ: FCEL): KeyBanc Capital Markets resumed coverage with a Sector Weight rating. The stock traded near $4 on Thursday. The 52-week trading range is $2.87 to $12.62.

Rivian Automotive Inc. (NASDAQ: RIVN): D.A. Davidson started coverage with an Underperform rating and a $24 price target. The stock traded near $32 on Thursday. The 52-week trading range is $29.16 to $179.47.

ALSO READ: The 7 Highest-Yielding Dividend Kings Likely Can Fight Inflation and a Recession

Roku Inc. (NASDAQ: ROKU): Wolfe Research initiated coverage with a Peer Perform rating and a $101 price target. The 52-week trading range is $75.03 to $490.76, and shares were trading just under $94 on Thursday.

SJW Group (NYSE: SJW): Wells Fargo lowered its Overweight rating to Equal Weight and trimmed the $67 price target to $66. The 52-week trading range is $57.17 to $73.69, and shares traded near $61 apiece on Thursday.

SolarEdge Technologies Inc. (NASDAQ: SEDG): Oppenheimer upgraded the stock to Outperform from Peer Perform and has a $334. The 52-week trading range is $200.86 to $389.71, and shares were trading above $299 on Thursday.

T-Mobile US Inc. (NASDAQ: TMUS): Wolfe Research started coverage with an Outperform rating and a $159 price target. The stock traded near $135 on Thursday, in a 52-week range of $101.51 to $150.20.

With interest rates and inflation rising, what are balanced growth and income investors to do? Jefferies favors six top BDC stocks that offer outsized dividends and growth potential.

In addition, Credit Suisse picks winners from among defensive specialty chemicals stocks, and see which gold and silver miners may be the next takeover candidates. Another key analyst has cautious optimism on three top tech stocks.

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