The futures traded lower after the fourth consecutive risk-off day across Wall Street, when all the major indices again closed lower after opening trading higher. We start the last third of 2022, entering one of the worst months for stocks seasonally and historically. Over the past 25 years, the S&P 500 average monthly return for September is approximately −0.4%.
As we noted recently, it appears that the summer rally was a product of massive short covering, which included big momentum futures and options trading computers and algorithms that followed the markets off the June lows. Toss in the Reddit meme stock trading army returning to the game, and it all seems to add up to a classic bear market rally.
Wall Street will be focused on Friday’s August nonfarm payroll report. Currently, the consensus forecast calls for 318,000 in nonfarm payrolls additions for the month, as well as an unemployment rate of 3.5%. Note that July had a stunning 528,000 in nonfarm payrolls and a 3.5% unemployment rate.
Interest rates were modestly higher across the Treasury curve, as the focus remained on the two-year note, which again Wednesday hit a 3.50% yield, the highest since 2007. The inversion with the 10-year note stayed in place with the 3.13% Wednesday close. Many fixed income traders feel the inversion signals recession, which technically we are in.
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Brent and West Texas Intermediate crude both closed lower, but off the early lows, as analysts continue to cite the threat of a weakening economy. Natural gas closed flat, while gold closed down. The only winner on the day was Bitcoin, which edged back over the $20,000 level.
24/7 Wall St. reviews dozens of analyst research reports each day of the week 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 analyst upgrades, downgrades and initiations seen on Thursday, September 1, 2022.
Ambarella Inc. (NASDAQ: AMBA): Baird reiterated an Outperform rating but cut its $125 target price to $90. The consensus target is $113.04 for now. The stock closed down almost 20% on Wednesday at $67.88 after the company gave a soft outlook despite beating expectations.
Amgen Inc. (NASDAQ: AMGN | AMGN Price Prediction): Oppenheimer reiterated an Outperform rating with a $290 target price. The consensus target for the biotech giant is $253.12. Wednesday’s close was at $240.30.
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Apollo Global Management Inc. (NYSE: APO): Barclays initiated coverage with an Overweight rating and a $70 target price. That compares with the $69.91 consensus target and Wednesday’s close at $55.61.
Ares Management Corp. (NYSE: ARES): Barclays started coverage with an Overweight rating and a $92 price objective. The consensus target is $86.55. Wednesday’s close was at $74.14.
Baidu Inc. (NASDAQ: BIDU): J.P. Morgan’s upgrade to Overweight from Neutral included a price target hike to $200 from $160. The consensus target is $199.25. The shares closed on Wednesday at $143.97, up almost 5% on the day after beating second-quarter earnings estimates.
Best Buy Co. Inc. (NYSE: BBY): Goldman Sachs reiterated a Sell rating on the electronics retailing giant and has a $56 target price. The consensus target is $77.85 for now. The stock closed down almost 6% on Wednesday at $70.60 after an ugly earnings report for the quarter.
Carlisle Companies Inc. (NYSE: CSL): Oppenheimer maintained an Outperform rating with a $360 price target. The consensus target is $332.36. The shares closed on Wednesday at $295.76.
Charles Schwab Corp. (NYSE: SCHW): Barclays started coverage on the legacy discount brokerage firm with an Equal Weight rating and an $81 target price. The consensus target is up at $88.36. The stock closed on Wednesday at $70.96.
ChargePoint Holdings Inc. (NYSE: CHPT): Oppenheimer reiterated an Outperform rating with a $40 price target. The consensus target is $23.47 for now. The stock closed over 12% higher on Wednesday at $16.27. Despite posting a loss for the quarter, the company said forward demand is strong.
Chewy Inc. (NYSE: CHWY): Baird reiterated an Outperform rating on the popular online pet food and toy company. Its $45 target price is less than the $46.62 consensus figure. The last trade on Wednesday came in at $34.44, down almost 8% on the day after sales numbers missed estimates.
CrowdStrike Holdings Inc. (NASDAQ: CRWD): Oppenheimer maintained an Outperform rating on the cybersecurity giant and has a $250 price target. The consensus target is $240.47. The last trade on Wednesday was $46.62 $182.61, down almost 6% for the day despite beating earnings estimates.
Datadog Inc. (NASDAQ: DDOG): BofA Securities initiated coverage with a Buy rating and a $135 target. That compares with a $141.50 consensus target and Wednesday’s close at $104.95.
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First Solar Inc. (NASDAQ: FSLR): Baird reiterated an Outperform rating and raised its $119 price target to $164. The consensus target is $113.81. The shares closed over 6% on Wednesday at $127.55 after the company released a massive investment plan to increase U.S. manufacturing.
Fiserv Inc. (NASDAQ: FISV): Baird maintained an Outperform rating and bumped up its $132 target price to $135. The consensus target is $125.88. Wednesday’s close was at $101.19.
Heico Corp. (NYSE: HEI): Goldman Sachs reiterated a Buy rating with a $172 price target. The consensus target is $157.64. Shares were last seen on Wednesday trading at $152.39.
LSB Industries Inc. (NYSE: LXU): UBS initiated coverage with a Buy rating and a $20 target. The consensus target is $25.48. The stock closed over 3% higher on Wednesday at $15.77.
Monster Beverage Corp. (NASDAQ: MNST): Zacks named this stock as its Bear of the Day due to its near-term outlook and valuation. The stock has traded as high as $99.81 in the past year but closed most recently at $88.83, which is down almost 11% in the past month.
PPG Industries Inc. (NYSE: PPG): Baird reiterated an Outperform rating and has a $180 target price. The consensus target is $146.48. The final trade for Wednesday was reported at $126.97.
Rocket Lab USA Inc. (NASDAQ: RKLB): Cowen lifted its Market Perform rating to Outperform and hiked the $6.50 target price to $8. The consensus target is up at $12.88. The stock closed at $5.50 on Wednesday, a 7% gain for the day on the upgrade.
Roper Technologies Inc. (NYSE: ROP): Oppenheimer maintained its Outperform rating and has a $500 target. The consensus target is $483.63. The stock closed at $402.61 on Wednesday.
Shattuck Labs Inc. (NASDAQ: STTK): BTIG Research started coverage with a Buy rating and a $12 price target. The consensus target is up at $20.50. The $3.25 close on Wednesday was a 7% gain for the day.
Signify Health Inc. (NYSE: SGFY): BTIG Research initiated coverage with a Buy rating and a $35 price target. The consensus target is $26.45, and shares closed on Wednesday at $27.87.
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Tecnoglass Inc. (NYSE: TGLS): Zacks points out that its Bull of the Day stock has outperformed both Tesla and Apple over the past two years. Its shares last closed at $21.78, and the consensus price target of $35.20 would be an all-time high.
Visa Inc. (NYSE: V): Goldman Sachs reiterated a Buy rating on the credit card giant and has a $283 target price. The consensus target is $261.35. The closing share price on Wednesday was $198.71.
Welltower Inc. (NASDAQ: WELL): Morgan Stanley resumed coverage with an Overweight rating and a $90 price objective. The consensus target is $92.42. The stock closed on Wednesday at $76.66.
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Bank of America, PepsiCo and other Goldman Sachs Conviction List stock picks have a defensive posture, pay solid dividends and make sense now for concerned investors as we enter the weakest time of the year for the equity markets.
Also, see why three defense stocks are poised to be top performers.
Wednesday’s top analyst upgrades and downgrades included Big Lots, Hewlett Packard Enterprise, L3 Harris Technologies, Meta Platforms, Nasdaq, Pinduoduo, Sony, TransUnion and Ulta Beauty. Analyst calls seen later in the day were on Blackstone, Coinbase Global, Paysafe, PayPal, Robinhood Markets, Snap and more.
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