All eyes will be on the U.S. Federal Reserve's meeting this week with markets expecting another significant increase in interest rates. Bank of America is expecting a 75-basis point rate hike as August's CPI print overshadowed the favorable trends in producer and import prices.
For the week ending Sept. 17, electric flying taxi maker Eve stood out taking the top gainer spot for the second week in a row (in our segment), while financial outlook was a main theme among majority of the worst five decliners of this week. The S&P 500 saw its worst weekly performance (-5.17%) since mid-June, with all 11 sectors being in the red. YTD, the SPDR S&P 500 Trust ETF (SPY) is -18.82%. The Industrial Select Sector SPDR (XLI), which too had seen rare gains, like SPY last week (having broken a three-week losing streak), shed -6.38%. YTD, XLI is -15.69%.
The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +1% each this week. YTD, three out of these five stocks are in the green.
Eve Holding (NYSE:EVEX) +43.97%. The Melbourne, Fla.-based eVTOL aircraft maker's stock rose throughout the week with +10% gains on two successive days (Sept. 13-14). YTD, Eve, which is backed by Brazilian aircraft maker Embraer, has gained +9.04%. The SA Quant Rating on the shares is a Hold, which takes into account factors such as Momentum and Profitability, among others. EVEX has an F factor grade for Profitability and A+ factor grade for Momentum, currently. The rating is in contrast to to the average Wall Street Analysts' Rating of Buy, wherein 2 out of 4 analysts tag the stock as a Strong Buy.
Enovix (ENVX) +3.23%. The Fremont, Calif.-based lithium-ion battery maker was back among the gainers after being among the losers two weeks ago. However, the stock has seen volatility — having swung to gains following its quarterly earnings results but swapping places among top gainers and decliners since then. YTD, the stock has declined -20.31%, the most among this week's top five gainers. The SA Quant Rating on the stock is Hold with Growth having a factor grade of B and Profitability with a score of D. The average Wall Street Analysts' Rating differs with a Strong Buy rating, wherein 5 out of 6 analysts tag the stock as a Strong Buy.
The chart below shows YTD price-return performance of the top five gainers and SP500:
China Southern Airlines Company (ZNH) +2.09%. The stock was back among the top five gainers after over two months. YTD, ZNH has shed -10.89%; being the only other stock besides ENVX among this week's gainers which is in the red for this period.
Icahn Enterprises (IEP) +1.11%. The Florida-based conglomerate has a Wall Street Analyst Rating of Strong Buy, from 1 analyst. The SA Quant Rating concurs with a Strong Buy rating of its own, with Growth having a score of B+ and Valuation with a factor grade of A. YTD, the shares have risen +4.40%.
KBR (KBR) +1.11%. Earlier in the week, the Houston-based company received a $38M contract for automated fuel handling equipment maintenance. The SA Quant Rating on the stock is Hold, with Profitability having a factor grade of C+ and Growth with a score of B-. The average Wall Street Analysts' Rating differs with a Strong Buy rating, wherein 7 out of 10 analysts see it as a Strong Buy. YTD, KBR has gained +3.36%.
This week's top five decliners among industrial stocks (market cap of over $2B) all lost more than -13% each. YTD, all these five stocks are in the red.
Arconic (NYSE:ARNC) -24.10%. The aluminum products maker's stock fell the most on Sept. 15 (-16.64%) after the company slashed its FY22 outlook noting that Q3 will be impacted by production outages and other operational challenges in Tennessee and Davenport that have reduced production from planned operating rates. The Pittsburgh, Pa.-based company also said that Q3 and Q4 results are expected to see a negative impact as hyperinflationary energy costs are driving increased cost pressures and declining demand in Europe. Q3 adjusted EBITDA is expected to be in the range of $135M to $150M. Arconic expects FY22 revenue to be between $9.2B to $9.5B (prior range was $9.6B to $10B) Consensus $9.25B. Adjusted EBITDA expected between $715M and $765M (prior forecast was of the low end of the range of $820M to $870M.
The SA Quant Rating on ARNC is Hold, with Profitability having a factor grade of C- and Valuation with a score of C+. The rating is in contrast to the average Wall Street Analysts' Rating of Buy, wherein 3 out of 5 analysts see it as Strong Buy. YTD, the stock has shed -38.75%.
FedEx (FDX) -22.98%. The Memphis, Tenn.-based company saw its stock plummet -21.40% on Sept. 16 after Q1 results (post market Sept. 15) widely missed analysts' estimates and the freight transport provider withdrew its FY23 earnings guidance. The news saw a flurry of downgrades from Wall Street, while Transportation ETFs also fell with stocks of FedEx peers also feeling the pressure.
The SA Quant Rating on FDX is Hold, with a factor grade of C+ for Momentum and a D- score for Growth. The average Wall Street Analysts' Rating differs with a Buy rating, wherein 15 out of 30 analysts see it as Strong Buy. YTD, the stock has declined -37.74%.
The chart below shows YTD price-return performance of the worst five decliners and XLI:
Generac (GNRC) -15.89%. The Waukesha, Wis.-based company, which sells power generation equipment, saw its stock decline throughout the week. teamed with Pearlstone Energy Limited to provide energy management solutions to commercial and industrial facilities in the United Kingdom. Solar system installer Pink Energy is suing Generac over supplying an allegedly faulty product for its solar installations, Renewables Now reported. Generac, however, noted that Pink Energy customers suffered from poor installation.
The average Wall Street Analysts' Rating on GNRC is Strong Buy, wherein 14 out of 21 analysts see the stock as such. The rating is in stark contrast to the SA Quant Rating of Sell, with Profitability possessing a score of B, while Valuation with a factor grade of D. YTD, the stock has declined -43.12%.
GXO Logistics (GXO) -13.65%. The Greenwich, Conn.-based company was among the FedEx peers which saw its stock slump on Sept. 16 (-8.30%). The SA Quant Rating on the stock is Hold, with a factor grade of D for Momentum and an A+ and C+ score for Growth. The average Wall Street Analysts' Rating differs with a Buy rating, wherein 9 out of 15 analysts see it as Strong Buy. YTD, the stock has declined -55.86%, the most among this week's worst five performers.
Flowserve (FLS) -13.58%. The stock fell (-7.66%) on Sept. 14 after the Texas-based company said its Q3 EPS would be impacted due to technology disruptions and one-time expenses. Credit Suisse downgraded the stock to Neutral from Outperform following the news. YTD, FLS has shed -11.21%. The SA Quant Rating on the stock is Hold, with both Profitability and Growth carrying a C score. The average Wall Street Analysts' Rating differs with a Buy rating, wherein 5 out of 13 analysts seeing it as a Strong Buy.