The futures were lower Monday, as we get set to kick off trading after a wild ride last week that saw some big moves up and down. All the major indexes finished lower on Friday, after being up for most of the day. The big story, along with the excellent and the disappointing earnings reports from big tech, was that the economy added a stunning 517,000 jobs in January. Analysts had expected 180,000. Also, the unemployment rate dropped to 3.4%, the lowest since 1969.
Job growth is good, but with far more jobs open than potential job seekers, wage inflation will now be a component that the Federal Reserve watches closely. It will also clear the path for the Fed to hike by 25 basis points in March and May. It likely will pause then, and the 5.25% federal funds rate likely stays in place until next year.
Yields surged across the Treasury curve on Friday, after the huge jobs numbers, as sellers were eager to collect profits after a sizable rally in government paper. The 10-year note closed up 14 basis points at 3.53%. With the two-year paper surging higher by almost 20 basis points to close at 4.29%, the wide inversion between the two suggests a recession is on the way.
Brent and West Texas Intermediate crude both ended the day lower, closing out yet another down week for the benchmarks. Concerns over rising inventories and analysts tapping the brakes on China demand drove prices lower. Natural gas also finished the day lower, as once again it appears that Europe has dodged a shortage after an unseasonably warm start to winter.
Gold plunged as interest rates shot higher, after the stunning jobs data catapulted yields higher. The precious metal closed 3.5% lower for the week, the biggest weekly decline since last October. Note that the bullion has had a big run, so profit-taking was also part of the equation. Bitcoin closed down Friday, to top off an otherwise very solid week for the cryptocurrency.
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 Monday, February 6, 2023.
Bill.com Inc. (NASDAQ: BILL): SMBC Nikko downgraded the stock to Neutral from Outperform and cut its $140 price target to $110. The consensus target is $138.23, and the stock closed down 3% on Friday at $108.11.
Boeing Co. (NYSE: BA): RBC Capital Markets lowered its Outperform rating to Sector Perform with a $225 target price. The consensus target is $221.57, and Friday’s closing share price was $206.01.
Camden Property Trust (NYSE: CPT): Piper Sandler downgraded the apartment real estate investment trust giant from Overweight to Neutral with a $136 target price. The consensus target is $137.67. The stock closed at $121.74 on Friday.
Cardinal Health Inc. (NYSE: CAH): As Baird upgraded the stock to Outperform from Neutral, it raised its $87 price target to $94. The consensus target is $84.29. The shares closed on Friday at $78.67, up over 3% on the day.
Cognizant Technology Solutions Corp. (NASDAQ: CTSH): Though Piper Sandler cut its Outperform rating to Neutral, it also bumped the $66 price target to $68. The consensus target is $63.01. The stock closed on Friday at $68.22.
ConocoPhillips (NYSE: COP): CapitalOne downgraded the energy giant to Equal Weight from Overweight. Its $102 price target is lower than the $138.23 consensus target. Friday’s close was at $108.11.
C3.ai Inc. (NYSE: AI): D.A. Davidson started coverage with a Buy rating and a $30 target price. The consensus target is just $15.44. The stock closed 18% higher on Friday at $25.88, after the company said last week that ChatGPT will be included in a new suite of products.
Enphase Energy Inc. (NASDAQ: ENPH): Janney started coverage with a Neutral rating and a $238 target price. That compares with a $303.63 consensus and Friday’s closing share price of $222.93.
Erasca Inc. (NASDAQ: ERAS): Morgan Stanley upgraded the stock to Overweight from Equal Weight and has a $15 target. The consensus target is higher at $18.60. On Friday, the close at $4.35 was up 5% for the day on the upgrade.
24/7 Wall St.Ford Motor Co. (NYSE: F): Deutsche Bank’s downgrade to Sell from Hold came with a target price trim to $11 from $13. The consensus target is $13.97. Friday’s $13.23 close was down almost 8% on the day after missed earnings expectations.
H.B. Fuller Co. (NYSE: FUL): Citigroup upgraded the stock to Buy from Neutral. It also boosted its $72 target price to $85, above the $81 consensus estimate. Friday’s was at $73.93.
Herbalife Nutrition Ltd. (NYSE: HLF): BofA Securities initiated coverage with an Underperform rating and a $14 target price. The consensus target is up at $28.50. The stock was last seen Friday trading at $16.62, which was down over 9% on the tepid research.
International Paper Co. (NYSE: IP): UBS upgraded the stock to Neutral from Sell, and it lifted its $31 target price to $43. The consensus target is $35.75. The shares closed on Friday at $41.36.
Meta Platforms Inc. (NASDAQ: META): DK Bank’s upgrade was from Sell to Hold with a $180 target price. The consensus target is higher at $202.28. The stock closed on Friday at $186.53.
Neurocrine Biosciences Inc. (NASDAQ: NBIX): While Morgan Stanley upgraded the shares to Overweight from Equal Weight, it also lifted its $120 target price to $130. That compares with the $127.75 consensus target and Friday’s closing print of $110.03.
Nordstrom Inc. (NYSE: JWN): The Reduce rating at Gordon Haskett is now at Hold, and the firm has a $22 target. The consensus target is $17.82 for now. The shares exploded Friday, closing up almost 25% at $26.38, after it was disclosed that activist Ryan Cohen was buying stock in a big way.
Nutrien Ltd. (NYSE: NTR): Raymond James downgraded the shares to Market Perform from Outperform and has a $90 target price. The consensus target is $98.90. The stock closed on Friday at $82.96.
Spirit Aerosystems Holdings Inc. (NYSE: SPR): RBC Capital Markets downgraded the stock to Sector Perform from Outperform. It also cut its $38 price target to $36, below the $37.50 consensus target. The stock closed almost 5% lower on Friday at $34.43, in part on Boeing downgrades and issues.
Stanley Black & Decker Inc. (NYSE: SWK): Citigroup’s upgrade to Neutral from Sell included a target price boost to $106 from $69. The consensus target is $87.38. The stock closed on Friday at $93.82.
Tradeweb Markets Inc. (NASDAQ: TW): Goldman Sachs raised its $79.50 price target on the Buy-rated shares to $90. The consensus target is $79.83. Friday’s close was at $71.97.
Upstart Holdings Inc. (NASDAQ: UPST): The Buy rating at Loop Capital has dropped to Hold, but its $24 target is still higher than the $14.54 consensus target. The stock closed at $22.10 on Friday, which was down 7% for the day on the downgrade.
It may be time to sell the bear market rally and buy stocks that pay good dividends and can act as a hedge against further downside. Seven outstanding stocks look well situated if the selling returns, and they are now offering investors timely entry points.
Friday’s top analyst upgrades and downgrades included FedEx, First Solar, Fortinet, Hasbro, Meta Platforms, Okta, Peloton Interactive, Qualtrics International, United Parcel Service and Waste Management.
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