The futures traded lower as we get set to end a roller-coaster week that saw a huge rally Wednesday after the Fed Chair’s speech, and then the euphoria wore off Thursday and the sellers took advantage of the big gains over the past month. The major indexes closed mixed, with only the Nasdaq ending higher on Thursday after the ISM manufacturing data disappointed. While not erasing all this week’s gains, the closing print put a solid dent in the risk-on enthusiasm.
The biggest news Friday is the November jobs report, which came in above the estimates for 200,000 new jobs being added. This probably will reinforce the Federal Reserve’s “higher for longer” thesis, which basically assumes that when the terminal rate for federal funds is reached at 5.00% to 5.25%, that rate could stay in place well into 2024.
Treasury yields plummeted as buyers rushed in to buy maturities across the curve on the possibility of lower rate hikes, and traders perhaps sensing that a safe haven might be a place to be going forward. The yield on the benchmark 10-year note dropped to a stunning 3.53%, the lowest since late September. The inversion between the 10-year and the two-year yield remained in place as the latter closed at 4.24%.
Brent and West Texas Intermediate crude followed through on Wednesday’s rally that was ignited by a huge oil inventory draw, and both closed modestly higher. Analysts cited the $60 European Union price cap as one of the reasons for the move higher. Natural gas closed the day flat, while gold surged higher for the second day. Bitcoin closed down.
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 Friday, December 2, 2022.
ADT Inc. (NYSE: ADT): Citigroup resumed coverage on the home security giant with a Buy rating and an $11 target price. The consensus target is $9.80. Thursday’s close at $9.68 was almost 4% higher on the day.
BioXcel Therapeutics Inc. (NASDAQ: BTAI): Goldman Sachs raised its Sell rating to Neutral with a $16 target price. The consensus target is way up at $47.64. The stock closed Thursday at $17.97, up over 8% after Phase 3 data was announced for the Serenity III trials.
Box Inc. (NYSE: BOX): Oppenheimer reiterated an Outperform rating with a $35 target, higher than the $33.40 consensus target. Thursday’s close at $29.22 was up almost 7% on the day after the company beat estimates and revenue increased year over year.
Consol Energy Inc. (NYSE: CEIX): Zacks selected this stock as its Bull of the Day. The analyst makes the case that with the coal industry under pressure, this miner has been “a diamond in the rough.” Shares last closed at $72.91, and the consensus target of $80.00 would be an all-time high.
Costco Wholesale Corp. (NASDAQ: COST): Oppenheimer reiterated an Outperform rating with a $550 target price. The consensus target is $562.93. Thursday’s close at $503.86 was down close to 7% due to weak November sales data.
CrowdStrike Holdings Inc. (NASDAQ: CRWD): Redburn initiated coverage with a Buy rating and a $175 target. The consensus target is $185.19. The shares closed almost 6% higher on Thursday at $124.07 on a bounce-back day.
G-III Apparel Group Ltd. (NASDAQ: GIII): C.L. King cut its Buy rating to Neutral and lowered its $28 target price to $22. The consensus target for is $23.29. Thursday’s close at $11.97 was down 45% for the day after the company badly missed estimates.
Gilead Sciences Inc. (NASDAQ: GILD): Oppenheimer raised its $95 price target on the Outperform-rated biotech giant to $105. The consensus target is just $81.75. Thursday’s close was at $87.90.
Guidewire Software Inc. (NYSE: GWRE): J.P. Morgan initiated coverage with an Overweight rating and a $78 target price. The consensus target is $81.77. The stock closed on Thursday at $60.90.
GXO Logistics Inc. (NYSE: GXO): Exane BNP Paribas started coverage with a Neutral rating and a $40 price target. The consensus target is up at $56.44. The shares closed on Thursday at $46.35.
Hubbell Inc. (NYSE: HUBB): Wolfe Research’s downgrade was from Peer Perform to Underperform with a $235 target price. The consensus target is $239.29. Thursday’s close was at $252.53.
Lennox International Inc. (NYSE: LII): Wells Fargo’s upgrade to Overweight from Equal Weight included a price target hike to $300 from $238. The consensus target is $246.21. The stock closed on Thursday at $268.36, up over 3% for the day.
Liberty Global Inc. (NASDAQ: LBTYA): J.P. Morgan downgraded the stock to Neutral from Overweight and has a $23 target price. The $30.35 consensus target compares with Thursday’s closing price of $19.88.
Mobileye Global Inc. (NASDAQ: MBLY): New Street started coverage with a Buy rating and a $42 price target. That compares with the $42.00 consensus target and Thursday’s final print of $29.77, which was up over 4% on the day.
Navient Corp. (NASDAQ: NAVI): Morgan Stanley upgraded the shares to Equal Weight from Underweight and bumped up its $14 price target to $16. The consensus target is $15.65. Thursday’s $17.00 close up almost 4% on the day.
24/7 Wall St.Otis Worldwide Corp. (NYSE: OTIS): Barclays cut its Overweight rating to Equal Weight with an $80 target price. The consensus target is $77.58. The shares ended Thursday trading at $78.83.
PagSeguro Digital Ltd. (NYSE: PAGS): The Goldman Sachs downgrade from Neutral to Sell included a target price cut to $9 from $15. The consensus target is $20.02. The stock closed on Thursday at $9.73, down almost 8% for the day on the downgrade.
Palo Alto Networks Inc. (NASDAQ: PANW): Redburn initiated coverage with a Buy rating and a $270 target price target. The consensus target is $217.39. Thursday’s $178.40 close was up 5% on the day, another bounce-back trade.
Pentair PLC (NYSE: PNR): Barclays lifted its Equal Weight rating to Overweight. It also boosted its $48 target price to $55, above the consensus target of $50.53. The stock closed on Thursday at $46.64.
Saia Inc. (NASDAQ: SAIA): BofA Securities downgraded the trucking giant to Underperform from Neutral. It also trimmed its $216 target price to $215. The consensus target is up at $238.31. The stock closed over 2% lower on Thursday at $237.76 due to the downgrade.
Salesforce Inc. (NYSE: CRM): Oppenheimer maintained an Outperform rating and has a $185 target price. The consensus target is up at $215.01. The stock closed on Thursday at $147, down over 8% on news that the co-CEO stepped down. This is the second person to step down from that position in less than five years.
Sunrun Inc. (NASDAQ: RUN): Janney started coverage with a Neutral rating and a $30 price target. The consensus target is $46.01. The shares closed Thursday over 4% lower at $31.16.
Synchrony Financial Inc. (NYSE: SYF): Morgan Stanley downgraded the stock to Underweight from Equal Weight and trimmed its $31 price target to $29. The consensus target is $40.21. Thursday’s $35.94 closed was over 4% lower on the day after the downgrade.
Victoria’s Secret & Co. (NYSE: VSCO): J.P. Morgan’s downgrade to Neutral from Overweight came with a target price cut to $43 from $51. The consensus target is $45.82. The stock ended Thursday’s session at $43.11, a drop of over 6% on the downgrade and disappointing results.
24/7 Wall St.Vizio Holding Corp. (NYSE: VZIO): Morgan Stanley initiated coverage on the electronics heavyweight with an Equal Weight rating and a $13 target price. The consensus target is higher at $15.05. The stock closed 3% lower on Thursday at $9.96.
Whirlpool Corp. (NYSE: WHR): This appliance maker is the Zacks Bear of the Day stock. The analyst suggests that “bears have had loads of fun in this stock in 2022.” Shares have traded as high as $245.44 in the past year but closed most recently at $149.02.
Zscaler Inc. (NYSE: ZS): Redburn started coverage with a Neutral rating and a $135 price target. The consensus target is higher at $203.33. The stock closed on Thursday at $144.50, up over 8% on the day, after posting earnings that beat expectations.
While the bear market rally has been stunning, it may be smart to sell now and use the proceeds to buy stocks that pay good dividends and can serve as a hedge against further downside. Seven hard asset stocks fit the bill.
Thursday’s early top analyst upgrades and downgrades included AppLovin, Carvana, CrowdStrike, DocuSign, Fisker, Foot Locker, Intuitive Surgical, Rivian Automotive, Shopify, UnitedHealth, Workday and XPO Logistics. Analyst calls seen later in the day were on Ally Financial, Altimmune, Capital One Financial, GoodRx, Leslie’s, PagSeguro Digital, Regions Financial, Sirius XM, StoneCo, Tencent Music Entertainment and more.
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