The futures traded higher after a vicious risk-off Thursday that saw all the major indexes crushed after the ADP employment report came in much higher than anticipated. Friday’s nonfarm payroll report reinforced what many across Wall Street are already worried about: The Federal Reserve will continue to hike rates, albeit at smaller increments. Once the terminal rate is hit, which is expected to be 5.00% to 5.25%, that number will remain in place for longer than expected.

Treasury rates were higher across the curve, with the exception of the 30-year bond, Thursday after the surprising ADP report, and many expect they can go higher, especially after Neil Kashkari, the Minneapolis Fed President, noted that he felt the Federal Reserve could go as high as 5.4% before it stops hiking rates. The 10-year note closed at a 3.72% yield, while the two-year paper closed at 4.45%, once again widening the inversion many bond traders see as a recession indicator.

Brent and West Texas Intermediate crude closed higher after a dreadful day Wednesday that saw both pummeled. The main concern remains demand, especially as headlines out of China seem to change on a daily basis in regard to reopening and Covid restrictions. Natural gas continued to be pounded Thursday, down a stunning 10% to close at $3.75. Gold finished the day lower, after strong moves higher recently, while Bitcoin finished the session modestly higher.

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, January 6, 2023.

Ally Financial Inc. (NYSE: ALLY): BofA Securities downgraded the stock to Underperform from Buy and lowered its $35 price target to $26, below the $31.78 consensus target. The last trade on Thursday was reported at $25.11.

American Express Co. (NYSE: AXP): Stephens lowered its Equal Weight rating to Underweight with a $134 target. The consensus target is $168.12, and shares closed on Thursday at $146.43.

AppLovin Corp. (NYSE: APP): Benchmark initiated coverage with a Sell rating and a $7 target price. The consensus target is up at $26.89 for now. The shares closed on Thursday at $9.85, which was down close to 10% for the day on the downgrade and the weak tape.

AstraZeneca PLC (NASDAQ: AZN): BMO Capital Markets started coverage with an Outperform rating and an $82 target price. The consensus target is $75.83. The stock closed on Thursday at $69.81.

Charter Communications Inc. (NASDAQ: CHTR): When Truist Securities upgraded the stock to Buy from Hold, it blasted its $380 target price up to $550. The consensus target is $484.55, and Thursday’s close was at $361.43.
CME Group Inc. (NASDAQ: CME): Credit Suisse raised its Neutral rating to Outperform with a $191 target price. The consensus target is up at $205.05. The last trade for Thursday was for $169.75 a share.

Cognizant Technology Solutions Corp. (NASDAQ: CTSH): Wolfe Research downgraded the shares from Peer Perform to Underperform and has a $49 price target. The consensus target is $64.00. Thursday’s close was at $57.57.

Coinbase Global Inc. (NASDAQ: COIN): Cowen downgraded the stock to Market Perform from Outperform and has a $36 target price. The stock has traded as high as $246.27 in the past year, but shares closed over 11% lower on Thursday at $33.53.

Comcast Corp. (NASDAQ: CMCSA): The Truist Securities upgrade was from Hold to Buy with a $50 target price. The consensus target is $42.76. The shares closed on Thursday at $36.98.

CrowdStrike Holdings Inc. (NASDAQ: CRWD): Jefferies cut its Buy rating to Hold and lowered its $175 target price to $120. The consensus target is $180.95. Thursday’s close was at $94.89, down over 9% for the day on the downgrade.

Cullen/Frost Bankers Inc. (NYSE: CFR): The Neutral rating at BofA Securities rose to Buy with a $155 target price. The consensus target is $159.93. The stock closed on Thursday at $132.08.

Danaher Corp. (NYSE: DHR): Credit Suisse’s downgrade to Neutral from Outperform included a target price trim to $300 from $315. The consensus target is $305.76. The stock closed on Thursday at $255.23, down over 4% on the day.

Delta Air Lines Inc. (NYSE: DAL): Argus’s upgrade was from Hold to Buy with a $39 target price. The consensus target is $48.88, and the stock closed on Thursday at $35.22.

Dropbox Inc. (NASDAQ: DBX): Jefferies downgraded the stock to Hold from Buy. Its $25 target price is less than the $27.14 consensus figure. The shares closed down 3% on Thursday at $22.11.

ELF Beauty Inc. (NYSE: ELF): Zacks named this stock as its Bull of the Day. The analyst points out that the cosmetics and skin care purveyor has crushed quarterly earnings estimates and continued to raise its outlook despite the current economic environment. Shares last closed at $55.61, which is more than 48% higher than 90 days ago.

FibroGen Inc. (NASDAQ: FGEN): BofA Securities upgraded the shares to Buy from Neutral. It also lifted its $18 target price to $27, well above the $15.80 consensus target. The stock closed up almost 12% on Thursday at $18.00 due to the upgrade.

Five9 Inc. (NASDAQ: FIVN): Jefferies downgraded the shares to Hold from Buy and has a $65 target. The consensus target is $76.13. Thursday’s $66.47 close was down 4% for the day on the downgrade.
Marathon Oil Corp. (NYSE: MRO): Evercore ISI started coverage with an Outperform rating and a $35 target price. The consensus target is $34.81. The shares closed on Thursday at $25.87.

Microsoft Corp. (NASDAQ: MSFT): D.A. Davidson initiated coverage with a Buy rating and a $270 target price. The consensus target is up at $293.80. Thursday’s $222.31 close was a retreat of almost 3% on the day.

NovoCure Ltd. (NASDAQ: NVCR): H.C. Wainwright reiterated a Buy rating and boosted its $100 target price to $140. That compares with a $91.50 consensus and Thursday’s close at $118.80, which was a 68% gain for the day after stellar clinical results.

Olin Corp. (NYSE: OLN): As Barclays upgraded the stock to Overweight from Equal Weight, it bumped its $60 target price up to $65. The consensus target is $62.94. The stock closed on Thursday at $54.34.

Revolve Group Inc. (NYSE: RVLV): Piper Sandler lowered its Overweight rating to Neutral and cut the target price to $28 from $34. The consensus target is $26.69. The stock closed on Thursday at $21.31, down almost 9% for the day, likely on the downgrade and the weak tape.

Target Corp. (NYSE: TGT): Citing inventory issues, lagging sales and a failure to adapt to changing consumer shopping patterns, Zacks selected this retailer as its Bear of the Day stock. The shares have traded as high as $254.87 in the past year but closed most recently at $154.26.

Verint Systems Inc. (NASDAQ: VRNT): Jefferies downgraded the stock to Hold from Buy and lowered its $45 target price to $40. The consensus target is $48.25. The stock closed on Thursday at $35.85, down over 3% on the day.

Zimmer Biomet Holdings Inc. (NYSE: ZBH): Raymond James upgraded the stock to Outperform from Market Perform and has a $144 target price. The lower consensus target is $125.23, below Thursday’s closing print of $126.08.

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Seven of the Dividend Aristocrats with the biggest payouts also look like very timely total return picks to start 2023. With even moderate appreciation in their share prices, investors could be looking at double-digit return potential.

One key analyst sees a rebound coming for software stocks and has some top picks to buy now.

Thursday’s top analyst upgrades and downgrades included Baidu, Bank of New York Mellon, Charles Schwab, Corning, Merck, Meta Platforms, Microsoft, Nucor, Okta, Pfizer, Rivian Automotive, Snap, Target and Vornado Realty Trust.

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