The futures traded lower Thursday, after all the major indexes rallied, staged a huge reversal and sold off into the close after the Federal Reserve raised interest rates again, but this time only by 50 basis points. That puts the federal funds rate at 4.25% to 4.50%. The still very hawkish tone is what caused the late-day swoon as rates are now at the highest level in 15 years.
Some top Wall Street strategists are anticipating 25-basis-point hikes in both February and March in 2023, which could bring the terminal target rate to 4.75% to 5.00%, while some feel it is ultimately higher. The true rub for stock investors is how long will Fed Chair Powell keep rates at that level. Many feel it could be 2024 before any pivot to cut and lower rates.
Yields were mostly flat across the Treasury curve on Wednesday, after the increase in the federal funds rate. The spread on the two-year and 10-year note remained at levels not seen in over 40 years, as the 10-year closed at 3.50% while the two-year finished the day at 4.24%.
Brent and West Texas Intermediate crude continued to march higher after posting solid back-to-back 3% gains on Monday and Tuesday. The International Energy Agency says that oil could rally sharply in 2023, citing Russian sanctions and demand turning higher. Natural gas finished the day lower, after big gains earlier in the week, while gold closed down and Bitcoin finished the day modestly higher.
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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, December 15, 2022.
Ambarella Inc. (NASDAQ: AMBA): Stifel reiterated a Buy rating on the shares while raising its $88 target price to $100. The consensus target is $94.10. The shares closed on Wednesday at $89.35, which was up over 3% for the day.
Amgen Inc. (NASDAQ: AMGN | AMGN Price Prediction): Goldman Sachs started coverage on the biotech giant with a Buy rating and a $303 target price. That compares with a consensus target of $265.94 and Wednesday’s closing share price of $271.13.
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Archer Daniels Midland Co. (NYSE: ADM): UBS initiated coverage with a Buy rating and a $115 target price. The consensus target is $100.08. The stock closed on Wednesday at $92.74.
Blackstone Inc. (NYSE: BX): Jefferies reiterated a Buy rating on the stock, which is on the firm’s Franchise List of top picks. Its $100 price objective compares with the $99.50 consensus target. The stock closed on Wednesday at $80.64, down close to 4% on the day.
Bloom Energy Corp. (NYSE: BE): UBS started coverage with a Buy rating and a $35 price target. The consensus target is $28.63. Wednesday’s $23.26 was up close to 6% for the day on the coverage.
Carnival Corp. & PLC (NYSE: CCL): Stifel bumped its $17 price target up to $18 while keeping a Buy rating on the shares. The consensus target is $10.71. The stock closed on Wednesday at $8.93.
Chevron Corp. (NYSE: CVX): Exane BNP Paribas’s downgrade was from Neutral to Underperform with a $190 target price. The consensus target is $192.44. Wednesday’s close was at $172.28.
Cogent Biosciences Inc. (NASDAQ: COGT): Needham initiated coverage with a Buy rating and a $26 target price. The consensus target is $21.50, and the stock closed on Wednesday at $12.10.
Danaher Corp. (NYSE: DHR): Deutsche Bank initiated coverage with a Buy rating and a $310 target price. The consensus target is $306.05. Wednesday’s final trade was for $274.17 a share.
EQT Corp. (NYSE: EQT): Wolfe Research’s upgrade of the energy giant was from Peer Perform to Outperform with a $59 price target. The consensus target is $59.81. Wednesday’s close was at $37.79.
FB Financial Corp. (NYSE: FBK): Hovde downgraded the shares to Market Perform from Outperform. Its $42 target price is less than the $43.63 consensus target. The stock closed more than 5% lower on Wednesday at $36.23 on the downgrade.
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Hasbro Inc. (NASDAQ: HAS): Jefferies reiterated a Buy rating with an $85 target price. The consensus target is $86.25. The shares closed on Wednesday at $59.96.
KKR & Co. Inc. (NYSE: KKR): Jefferies maintained a Buy rating on the asset management behemoth and has a $65 price target. The consensus target is $63.25. The stock closed at $49.34 on Wednesday.
nCino Inc. (NASDAQ: NCNO): Baird boosted its Neutral rating to Outperform with a $35 target price. The consensus target is $36.50. Wednesday’s close was at $27.06.
Nike Inc. (NYSE: NKE): Telsey Advisory reiterated an Outperform rating and raised its $110 target price to $130. The consensus target is $112.31. The stock closed on Wednesday at $111.45.
PACCAR Inc. (NASDAQ: PCAR): Morgan Stanley’s upgrade to Overweight from Equal Weight included a target price hike to $136 from $91. The consensus target is $98.47. The stock ended Wednesday’s session trading at $102.76.
Physicians Realty Trust (NYSE: DOC): KeyBanc Capital Markets upgraded the shares from Equal Weight to Overweight with a $17 target price. The consensus target is $16.93. The stock closed on Wednesday at $14.86.
Plug Power Inc. (NASDAQ: PLUG): UBS initiated coverage with a Buy rating and a $26 target price. The consensus target is $30.24. Wednesday’s $15.21 closed was up almost 8% for the day on the upgrade.
PulteGroup Inc. (NYSE: PHM): Barclays upgraded the homebuilder to Overweight from Equal Weight and boosted its $48 price target to $58. The consensus target is $51.83. Wednesday’s close was at $46.33.
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QuantumScape Corp. (NYSE: QS): Goldman Sachs downgraded the battery maker to Sell from Neutral and dropped its $8 target price to $5. The consensus target is $12.67 for now. The stock closed almost 6% lower on Wednesday at $6.69 in the wake of the downgrade.
Repligen Corp. (NASDAQ: RGEN): Deutsche Bank began coverage with a Hold rating and a $180 target price. The consensus target is $233.10. The stock ended trading on Wednesday at $177.42
RingCentral Inc. (NYSE: RNG): Though Morgan Stanley raised its Equal Weight rating to Overweight, it also trimmed its $55 target price to $50. The consensus target is $54.12. The shares closed almost 8% higher on Wednesday at $41.84 on the upgrade.
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Goldman Sachs believes that conditions for residential real estate investment trusts are poised to improve and that selective picks could set up patient investors for some big total return potential.
Wednesday’s early top analyst upgrades and downgrades included Affirm, American Express, Block, Centene, Etsy, Gilead Sciences, KeyCorp, Norwegian Cruise Line, Okta, PayPal, Philip Morris International, Pinterest, Robinhood Markets, U.S. Bancorp and Walt Disney. Analyst calls seen later in the day were on Best Buy, Caesars Entertainment, Darden Restaurants, Datadog, Digital Realty Trust, Hilton Worldwide, Lennar, Marriott International, PENN Entertainment, SolarEdge Technologies and more.
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