2023 Oct 20, US Market
Stocks fell Friday, capping a week of losses for U.S. markets. All three major indexes finished the week in the red. Investors grappled with a sharp increase in borrowing costs and the possibility of worsening violence in the Middle East.
Bond prices rose and yields declined. The 10-year U.S. Treasury yield settled at 4.924%, down from 4.987% Thursday. The 10-year Treasury yield has risen more than a full percentage point since the Federal Reserve last raised rates at the end of July, an unusually large jump in such a short time frame. The S&P 500 has gained 10% this year, but is down 7.5% since July 26.
Some investors are wondering whether the bond selloff could soon reverse if economic data starts to soften or geopolitical tensions worsen. Jerome Powell, chair of the central bank, suggested Thursday that those higher yields could lead the Fed to pause its campaign of interest rate increases.
Financial stocks sputtered as more institutions reported third quarter results. Regions Financial declined 12% after earnings while American Express dropped 5.4%. The KBW Nasdaq Bank Index fell 3.1%. JPMorgan Chase stock fell 1.6%, declining for a fifth consecutive session.
So far this earnings season, 86 companies within the S&P 500, or 17% have reported earnings, according to FactSet. Within that group, earnings have grown 4.9% from a year ago, and 73% have topped Wall Street forecasts, raising hopes that profits will grow this quarter for the first time in a year.
Brent crude oil futures dropped 0.2% to settle at $92.16 per barrel, snapping a three-session win streak for the international benchmark. The S&P 500 energy sector fell 1.7%.
Shares of solar product manufacturer SolarEdge Technologies fell 27%, the worst performer in the S&P 500, after the company said installations of its equipment were slowing. Rival Enphase Energy dropped 15%.
Scotiabank upgraded AT&T (T) to Outperform from Sector Perform with an unchanged price target of $18.50. As the firm looks forward to 2024, it expects free cash flow to improve, supported by low capital intensity, improving operating earnings and reduced usage of working capital, the analyst tells investors in a post-earnings note.
Deutsche Bank upgraded Union Pacific (UNP) to Buy from Hold with a price target of $235, up from $223. The firm says that if U.S. Rail volumes remain encouraging, it sees meaningful outperformance potential relative to both the broader market and Canadian rails.
Wolfe Research upgraded Morgan Stanley (MS) to Peer Perform from Underperform without a price target post the Q3 report. Following the stock's recent underperformance, the shares appear fairly valued, with earnings risk better reflected in consensus estimates, says Wolfe.
JPMorgan upgraded Knight-Swift (KNX) to Neutral from Underweight with a price target of $57, up from $54, following the Q3 report. The U.S. Xpress Enterprises acquisition is showing progress sooner than expected and in a very difficult truckload market, the analyst tells investors in a research note.
Raymond James upgraded Crocs (CROX) to Outperform from Market Perform with a $110 price target. Raymond James believes the stock is oversold and that risk/reward is favorable given a highly discounted valuation, the analyst tells investors. Crocs surprised to the upside in the first half and Raymond James sees further momentum based on mobile app data checks and Google Trends, including an attractive overseas opportunity, the analyst added.
BofA downgraded SolarEdge (SEDG) to Underperform from Neutral with a $65 price target after the company pre-announced Q3 results headlined by a 20% revenue miss and 30% reduction in gross profit. While management attributes the miss to unexpected cancellations and pushouts from European distributors, this is "not just another destock story" and the messaging is "starkly more negative than several datapoints would have suggested," even late into the quarter, the analyst tells investors. Additionally, Oppenheimer downgraded SolarEdge Technologies to Perform from Outperform without a price target. Goldman Sachs also downgraded SolarEdge Technologies to Neutral from Buy with a price target of $131, down from $254.
Leerink downgraded Beam Therapeutics (BEAM) to Market Perform from Outperform with a price target of $20, down from $75. The restructuring to prioritize development in hematology and genetic diseases, and explore partnership opportunities for deprioritized immunology/oncology programs is "the right move," but the near- to medium-term catalyst path for the stock becomes more challenging on the heels of the decision, the analyst tells investors.
Redburn Atlantic downgraded Yum! Brands (YUM) to Neutral from Buy with a $115 price target. Given the "higher for longer" interest rate environment, there is heightened risk to the the company's earnings growth outlook as Yum! pares back buybacks, prioritizes debt paydown and faces higher interest expense, says the firm.
UBS downgraded Blue Owl Capital (OWL) to Neutral from Buy with a price target of $14, down from $15. The analyst sees see risks to the company's 2025 target of $1.00 dividend saying the unfavorable backdrop for business development company listings risks a fee rate uplift.
Oppenheimer downgraded CNH Industrial (CNHI) to Perform from Outperform without a price target. While the firm believes there are margin opportunities still to come, Oppenheimer questions whether the improvement can be insufficient to offset the current cycle view, the analyst tells investors in a research note.
UBS assumed coverage of Pfizer (PFE) with a Neutral rating and price target of $34, down from $36. While Pfizer screens well on valuation with some investors sensing a potential trough, it is tough to turn sentiment around given a lack of meaningful catalysts on the horizon, continuing uncertainty over COVID, and less business development optionality post-Seagen, the analyst tells investors in a research note.
Raymond James assumed coverage of Silgan Holdings (SLGN) with an Outperform rating with a price target of $55, up from $50, as part of a broader research note on Packaging names. Heading into earnings, newfound volume concerns are weighing on shares in the group, with investor unease shifting from destocking to the impact of potential consumer weakness, the analyst tells investors in a research note.
UBS assumed coverage of MasterCard (MA) with a Buy rating and $475 price target. The firm assumed or initiated coverage of 30 payments, processors and financial technology stocks. UBS believes software-led distribution is increasingly becoming the channel required to participate in the 70% of industry revenues sourced via underlying small businesses, of which the vast majority could ultimately be running through a software platform longer-term.
JPMorgan reinstated coverage of Amgen (AMGN) with a Neutral rating and December 2024 price target of $270, up from $265. Following the recent acquisition of Horizon Therapeutics, the company should generate 3% sales growth and mid single digit earnings growth for the remainder of the decade despite a number of pending loss of exclusivities, the analyst tells investors in a research note.
Roth MKM initiated coverage of Zimmer Biomet (ZBH) with a Neutral rating and $120 price target as the firm rolled out coverage on the Orthopedic industry with a focus on spine and diversified orthopedic companies. The firm projects 7% revenue growth and 9% EPS growth, in line with consensus, for 2023, when the company benefits from easy comparisons and a healthy backlog for hips and knees.
American Express (AXP) reported better-than-expected Q3 earnings and backed its FY23 EPS view
SolarEdge (SEDG) shares have gone off a cliff after the company pre-announced Q3 results that BofA said were "headlined" by a 20% revenue miss and 30% reduction in gross profit
HP Enterprise (HPE) shares slid after the company provided updated FY23 and FY24 guidance
Union Pacific (UNP) reported better-than-expected Q3 earnings and said its 2023 outlook "remains relatively unchanged"
General Motors (GM) said it made a "record offer" to the United Auto Workers, which includes 23% general wage increases
Eli Lilly (LLY) has filed a complaint with the U.S. International Trade Commission to block companies from importing and selling cheaper versions of its drug Mounjaro, WaPo reports
Jazz Pharmaceuticals (JAZZ) is exploring strategic options, including a potential sale, Bloomberg says
Google (GOOG) plans to make Pixel smartphones in India, TechCrunch reports
CVS (CVS) is removing certain cold medicines from its store shelves that contain phenylephrine, CNBC reports
JFE Steel is in talks to invest in Canada's Teck Resources (TECK), Reuters says
Amwell (AMWL) rose after it was selected with Leidos (LDOS) by the U.S.
Defense Health Agency to provide a hybrid care technology platform
Bowlero (BOWL) advanced after completing its $432.9M sale-leaseback with VICI Properties
Okta (OKTA) shares fell after the company confirmed a "threat actor viewed files uploaded by customers"
Banc of California (BANC) ended lower after announcing final regulatory approval for its merger with PacWest (PACW)
Sunrun (RUN) declined after Deutsche Bank downgraded the stock to Hold
Comerica (CMA) reported Q3 EPS that beat consensus, with CEO Curtis Farmer commenting, "We are very proud of the success this quarter"
Regions Financial (RF) reported Q3 results, with Wells Fargo downgrading the stock to Equal Weight and commenting the company's headwinds should last longer than previously expected
SLB (SLB) announces Q2 EPS and reaffirmed its Q4 outlook
World Acceptance (WRLD) reported Q2 EPS and revenue that beat consensus
Intuitive Surgical (ISRG) reported Q3 revenue that missed estimates
この記事が気に入ったらサポートをしてみませんか？