Companies that will benefit from a resilient economy are among the names that caught the eye of Wall Street and CNBC “Halftime Report” traders on Wednesday. As investors focused on the latest earnings reports weighing on the market, there were several upgrades from Wall Street analysts from stocks owned by the “Halftime Report” traders. One of these was Goldman Sachs, owned by Jim Lebenthal, a partner at Cerity Partners. He called the investment bank Wall Street a high-quality company at an attractive price. Wells Fargo analyst Mike Mayo agrees, raising his price target to $420 per share from $390. The new target implies a 12% upside potential from Tuesday’s close. Although the stock is cheap, that’s not the only reason to go for the name, Lebenthal said. He also believes the economy is doing better and the deal calendar will therefore pick up. “There will be M&A activity,” said Lebenthal, who owns the shares. “There’s going to be issuance that was basically dead for all these companies.” Goldman is up almost 10% year-to-date. Meanwhile, American Express should benefit from the upturn in travel, said Karen Firestone, CEO and co-founder of Aureus Asset Management. The payment card issuer was upgraded from equal weight to overweight by Morgan Stanley on Wednesday. The Wall Street firm said American Express’s higher-income customer base should position the company to weather a year in which delinquencies are expected to increase. AXP YTD Mountain American Express Annual Performance “It’s really a well run company,” Firestone said. “We like it for many reasons and think it needs more to do.” Joe Terranova, senior managing director of Virtus Investment Partners, owns Tractor Supply because of its fantastic balance sheet as well as strong momentum and customer loyalty, he said. Barclays began coverage of the stock on Tuesday with an Overweight rating and a price target of $254, meaning it has nearly 10% upside potential from Tuesday’s close. Cisco Systems is another name in Lebenthal’s portfolio. The company has just been added to Evercore ISI’s tactical outperform list, with the company noting that Cisco is well positioned to turn a profit next week. Cisco has had a couple of good quarters and has shown that corporate spending “holds through,” Lebenthal said. “This is a low beta name,” he said. “You don’t have the drama of Apple and what’s going on with China.” Another name Lebenthal owns is Delta Air Lines, which was upgraded to buy from neutral by Redburn on Wednesday. Investors who don’t believe in a recession will want to own airlines, Lebenthal said. Those who expect an economic downturn will want to avoid it, he added. One name downgraded Wednesday was Sherwin-Williams. When Keybanc downgraded the stock from “overweight” to “sector weight,” she cited slowing demand. Firestone, which owns shares, admitted the company is experiencing a “road wave.” “We think it’s a great company and we think we’ll see improvement in the second half of the year,” she said. — CNBC’s Michael Bloom contributed coverage.
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