Stocks on Monday morning were continuing Friday’s rally, although the strength was more muted with a 0.3% gain in the S&P 500 early futures trading. Earnings season is playing out and companies with stocks that have soared since the start of 2024 have been punished if they are not beating earnings and raising guidance. This is happening that the same time as investors are hoping slower economic data will over-ride the persistent inflation data so that the Federal Reserve can begin its rate cutting campaign.
Oggonomics is always looking for ideas and research that can benefit both short-term traders and long-term investors. This is where the daily analyst calls for upgrades, downgrades and initiations come into play.
Many analyst calls can be “strategic bull” calls by nature. After all, analysts often identify their picks of “stocks to buy” even when the stock market or a company’s sector are weak. Other analyst calls covering their picks of stocks to buy may have very long-term outlooks. The latter “bullish” calls may seem more “permanent” to readers than they do “strategic.” Other analyst calls can also be quite negative as they feature various stocks to sell, which can be strategic or also a long-term negative view.
It needs to always be considered by investors that no analyst call should be a sole reason to buy or sell a stock. Analysts often have no better information about the inside metrics of a company and no better access to outside data than institutional investors and retail investors alike. And daily analyst calls, and the impact from them or the news that acts a as catalyst for the calls, should help prove the Oggonomics mantra that the Efficient Market Hypothesis is not accurate in its assumptions.
These are Wall Street’s top analyst upgrades and analyst downgrades for May 6, 2024.
THE TOP ANALYST CALLS
Baidu Inc. (NASDAQ: BIDU) was maintained as Buy but the price target was lowered to $180 from $210 at Benchmark. The call is ahead of earnings and seemed to be more of a conservative approach to soft ad spending in general with a lower projected earnings and revenues for 2024.
DraftKings Inc. (NASDAQ: DKNG) was reiterated with a Buy rating and its price target was raised to $60 from $58 (versus $41.79 prior close) at Needham & Co. BTIG also reiterated its Buy rating and raised its price target to $55 from $53 in their call. Barclays also reiterated its Overweight rating and raised its target price to $54 from $52. DraftKings was indicated up less than 1% at $42.15 after the calls in Monday’s pre-market trading and it had a $50.42 consensus analyst price target.
Melco Resorts & Entertainment Limited (NASDAQ: MLCO) was raised to Overweight from Equal Weight at Morgan Stanley. The Macao casino’s price target was raised to $9.60 from $8.30 as the Morgan Stanley analyst team noted stabilizing/improving market share trends in the March-April timeframe and expecting higher free cash flow yield equivalents in 2025. Melco previously closed at $7.24 but its consensus price target was up at $10.72 and its 52-week range is $6.10 to $13.91.
Micron Technology Inc. (NASDAQ: MU) was raised to Outperform from Neutral and the price target was raised to $150 from $115 at Robert W. Baird. Baird’s rating had been Neutral for a year or more and the firm had previously raised its price target earlier in 2024 to $115 from $78 on March 19, 2024. Micron’s stock was up about 3% at $118.50 after the call, with a 52-week range of $59.55 to $130.54.
United States Steel Corporation (NYSE: X) was raised to Overweight from Equal Weight and the price target was lowered to $48 from $51 in the same call at Morgan Stanley, noting expected value creation from its own transformational investments. Morgan Stanley values U.S. Steel at $41 on a standalone valuation if the $55 acquisition by Nippon Steel is ultimately blocked and the report warns that U.S. Steel shares could trade down to $30 to $35 as the initial reaction. U.S. Steel shares closed down 1.5T at $36.47 ahead of the call and its shares were indicated up 2.7% at $37.45 after the call.
Bernstein adjusted some airline targets on Monday, favoring American versus Southwest. American Airlines Group Inc. (NASDAQ: AAL) was reiterated as Outperform and Bernstein’s target was raised to $22 from $21, versus a prior $13.85 close. Southwest Airlines Co. (NYSE: LUV) was maintained as Market Perform and Bernstein’s price target was cut to $26 from $27 after a $26.15 prior close.
MORE BIG CALLS, EVEN A 50-PERCENTER!
Banco Santander (Brasil) S.A. (NYSE: BSBR) was raised to Buy from Neutral at BofA, and the new $7.20 ADS price target is versus a prior $5.83 close and a 52-week range of $4.93 to $6.66. The report said earnings results show more evidence that a sharp earnings recovery is underway with higher net interest income and lower costs of risk.
Bausch + Lomb Corporation (NYSE: BLCO) was raised to Overweight from Equal Weight and the price target was raised to $18 from $16 at Morgan Stanley. Bausch + Lomb previously closed at $13.60 and was indicated up 3% at $14.00 after this analyst call.
Benchmark Electronics, Inc. (NYSE: BHE) was reiterated with a Buy rating and its price target was raised to $40 from $31 at Needham & Co.
Camden Property Trust (NYSE: CPT) was raised to Neutral from Underweight at Piper Sandler.
enCore Energy Corp. (NASDAQ: EU) was started with a Buy rating and was assigned a $7.50 price target at H.C. Wainwright & Co. enCore Energy, a small-cap domestic uranium producer, previously closed down 2% at $4.82 and it has a 52-week range of $1.93 to $4.99.
Essential Utilities, Inc. (NYSE: WTRG) was maintained with a Outperform rating but its price target was cut to $43 from $44 (versus $37.78 prior close) at Robert W. Baird.
Fluor Corporation (NYSE: FLR) was reiterated with an Outperform rating and its price target was raised to $46 from $42 at Robert W. Baird. Flour previously closed down 5.6% at $38.90 with a $45.19 consensus analyst price target.
Mid-America Apartment Communities, Inc. (NYSE: MAA) was raised to Outperform from Neutral and the price target was raised to $154 from $135 at Wedbush Securities.
PACS Group, Inc. (NASDAQ: PACS) closed down 0.7% at $24.91 ahead of the end of the post-IPO quiet period after its $21.00 IPO price in April. RBC Capital Markets started it as Outperform with a $30 price target. Truist started it with a Buy rating and a $32 price target. Citigroup started PACS as Buy with a $32 target and JPMorgan started it as Overweight with a $27 price target. Oppenheimer started PACS as Outperform with a $31 target.
Peloton Interactive, Inc. (NASDAQ: PTON) was maintained with a Neutral rating but its price target was slashed to $3.50 from $5.75 at Goldman Sachs. Peloton was indicated down another 2% from its $3.42 prior close, and it has a 52-week range of $2.70 to $9.87.
Robinhood Markets, Inc. (NASDAQ: HOOD) was reiterated with a Buy rating at Mizuho and the firm raised its price target to $21 from $20 in the call. Robinhood shares previously closed up almost 2% at $17.95 and the stock was indicated up +3% at $18.49 in pre-market trading.
Victoria’s Secret & Co. (NYSE: VSCO) was downgraded to Underweight from Equal Weight and its price target was cut to $15 from $19 at Morgan Stanley. Victoria’s Secret shares closed down 1% at $17.55 ahead of the call and its shares were indicated down almost 5% at $16.60 after the analyst report. Its 52-week range is $13.62 to $30.80.
