Why Analysts Are Pricing in a Recession: Upgrades and Downgrades of Boston Scientific, Conagra, Target and More

Investing

Published: December 20, 2022 11:20 am

Markets were more or less traded sideways on Tuesday. This comes after a fairly weak December, which is historically a strong month for the markets. However, expectations for next year are somewhat contributing to this recent downtrend as many analysts are pricing in a recession.

Considering inflation is at some of the highest levels we have seen in decades and the money supply is still holding near an all-time high, it is presumable that either the Federal Reserve will have to stay the course of raising interest rates or there will be economic fallout to like job losses to balance out the aforementioned factors.

We are already starting to see cracks in the housing market, with housing starts and permits for future home construction declining as higher mortgage rates take their toll on the market.

With only a handful of trading days left in 2023, it will be interesting to see how markets set up for the coming year.

Here, 24/7 Wall St. is reviewing additional analyst calls seen on Tuesday. 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 included AT&T, Darden Restaurants, L3 Harris, MGM Resorts, Nvidia and more.

BJ’s Wholesale Club Holdings Inc. (NYSE: BJ): Credit Suisse downgraded the stock to Neutral from Outperform and cut its $80 price target to $75. The shares traded near $66 on Tuesday. The 52-week range is $51.45 to $80.41.

Boston Scientific Corp. (NYSE: BSX): Citigroup resumed coverage with a Buy rating and a $54 price target. The shares traded near $46 on Tuesday. The 52-week range is $34.98 to $47.95.

Conagra Brands Inc. (NYSE: CAG): Morgan Stanley’s upgrade to Overweight from Equal Weight included a price target hike to $45 from $34. The 52-week trading range is $30.06 to $38.71. Shares changed hands near $38 apiece on Tuesday.

J.M. Smucker Co. (NYSE: SJM): Morgan Stanley lifted its Underweight rating to Equal Weight with a $158 price target. The 52-week trading range is $119.82 to $157.24. Shares changed hands near $154 apiece on Tuesday.

NetApp Inc. (NASDAQ: NTAP): J.P. Morgan downgraded the shares to Neutral from Overweight and has a $71 price target. The stock traded near $59 on Tuesday, in a 52-week range of $58.16 to $96.82.

Norfolk Southern Corp. (NYSE: NSC): Evercore ISI’s Outperform rating has dropped to In-Line, but the firm raised its $240 price target to $262. Shares have traded as high as $203.65 in the past year but were changing hands near $240 on Tuesday.

Spirit Airlines Inc. (NYSE: SAVE): As Deutsche Bank downgraded the stock to Hold from Buy, it cut its $27 price target to $24. The stock was last seen trading near $19, in a 52-week range of $15.92 to $28.30.

Stitch Fix Inc. (NASDAQ: SFIX): J.P. Morgan’s downgrade was to Underweight from Neutral. The stock has traded as high as $20.55 in the past year but was last seen near $3. That is up 84% year to date.

ALSO READ: 7 ‘Strong Buy’ Warren Buffett Dividend Stocks May Be Huge 2023 Winners

Target Corp. (NYSE: TGT): Credit Suisse lowered its Outperform rating to Neutral and cut its $165 price target to $160. The stock traded near $143 on Tuesday, in a 52-week range of $137.16 to $254.87.

Union Pacific Corp. (NYSE: UNP): Evercore ISI upgraded the shares to Outperform from In-Line and raised the price target to $232 from $204. The stock has traded as high as $278.94 a share in the past year but was last seen at around $204. That is down 18% year to date.

Whirlpool Corp. (NYSE: WHR): J.P. Morgan changed its Overweight rating to Neutral. Shares traded near $136 on Tuesday, in a 52-week range of $124.43 to $245.44.

Yelp Inc. (NYSE: YELP): When J.P. Morgan cut its Neutral rating to Underweight, it also reduced its $34 price target to $23. The stock traded near $26 on Tuesday, in a 52-week range of $25.44 to $39.27.

Domestic energy producers are expected to benefit from a buildup of the Strategic Petroleum Reserve. Five mega-cap leaders that pay big and dependable dividends are offering investors inviting entry points and look like outstanding ideas for 2023.

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