FedEx is the top industry winner, Herc the biggest decline amid rising rates and fears of recession


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Amid looming fears of a recession and interest rate hikes by some central banks around the world, FedEx led the winners, while Herc bore the brunt among industrial stocks.

For the week ending June 17, the SPDR S&P ETF Trust 500 (TO SPY) was in the red (-6.14%) for the second week right, before which he had seen a rare two weeks of gains that broke a 7-week losing streak. Since the start of the year, the ETF has been -22.97%. The Select Industrial Sector SPDR (XLI) has also been in the red for two consecutive weeks (-5.81%), before which it was in the green for two weeks. Since the start of the year, XLI has been -19.14%.

The top five gainers in the industrials sector (stocks with a market capitalization of more than $2 billion) did not post outrageous gains and only one hit a double-digit percentage change this week. Moreover, since the beginning of the year, the five actions are in the red.

FedEx (NYSE: FDX) +11.19%. Shares of the Memphis, Tennessee-based logistics provider saw their biggest rally in 29 years earlier this week after increasing its quarterly dividend by more than 50% and adding two directors to its board as part of of a deal with activist investor DE Shaw. The moves were welcomed by several analysts, including Citi’s Christian Wetherbee, who sees potential upside in the stock “toward $400 to $450/share over time.” The average Wall Street analyst rating is Buy, which contrasts with Hold’s SA quantitative rating, which takes into account factors such as growth and profitability, among others. Since the beginning of the year, FDX has decreased -11.11%.

Boeing (BA) +7.72%, plunged earlier this week along with the Dow Jones index, but the airline maker rallied in the week on reports that the company was ready to restart 787 deliveries in the coming weeks and after China Southern Airlines has concluded a test flight of 737 MAX. The company, however, is unsure of a clear timeline for approval of its 737 MAX 10. But Boeing is set to restart delivery of its 787 Dreamliner. The stock was also upgraded to a high-risk buy at Citi with a potential of 70%. SA’s quantitative rating on the stock is Hold, in which the company’s valuation has a D factor rating, while growth carries a C rating. -32.05%.

The graph below shows the 6-month price-yield performance of the top five winners and the SP500TR:

Upward Work (UPWK) +4.66% was among the stocks that Bank of America said would benefit from a changing world. Bofa expects “the gig economy will continue to grow within 10 to 20 years as Generation C enters the workforce.” Wall Street analysts’ rating is Buy, with an average price target of $32.18, in contrast to Hold’s SA Quant rating. Since the beginning of the year, Upwork has collapsed -44.79%the most in the top five this week.

Worldwide Hertz (HTZ) +2.81%. The Estero, Fla.-based car rental company saw its shares rise after approving a new $2 billion share buyback program. The Wall Street analyst rating is Buy with an average price target of $28.71. Since the beginning of the year, Hertz has been down -28.21%.

SPX (SPXC) +1.13%the Charlotte, North Carolina-based company, which makes temperature control products, saw its stock drop -13.10% YTD. The stock’s SA Quant rating is Buy, while the Wall Street analyst rating is Strong Buy with an average price target of $71.25.

This week’s top five declines among industrial stocks (market cap over $2 billion) all lost more than -16% each. Since the start of the year, these five stocks have been in the red.

Herk (NYSE: HRI) -20.32%. The Bonita Springs, Fla.-based company, which rents earthmoving and other material handling equipment, saw its inventory decline throughout the week, the most on June 16 (-11.34%) as the U.S. stock market tumbled on recession fears after the Federal Reserve hiked a rake a day ago to bring down inflation. Since the beginning of the year, the title has collapsed -43.25%. The SA’s quantitative rating on the stock is Hold, in which the company’s profitability has a factor rating of C+, while the valuation carries a rating of B. The rating contrasts with the average analyst buy rating of Wall Street, with 6 out of 10 calling it a strong buy.

Beacon Roofing Supply (BECN) -18.66%. Earlier this week, the Herndon, Va.-based company announced a $250 million share buyback program. BECN stock suffered a similar fate to HRI, declining throughout the week, the most on June 16 (-10.62%). Since the beginning of the year, the title has lost -12.41% but the stock’s SA Quant rating is Strong Buy, while the average Wall Street analyst rating is Buy with an average price target of $71.29.

The chart below shows the 6-month price-yield performance of the five worst declines and XLI:

Still Wire (WIRE) -17.49%. The Texas-based wire and cable maker’s stock made the losers’ list this time after being among the winners more than a month ago. Year-to-date, the stock is down -23.70%, but the SA quantitative rating and the average Wall Street analyst rating both give it a strong buy rating.

AZEK (AZEK) -16.73%. Shares of the Chicago-based building products maker fell sharply on June 13 (-7.60%) and June 16 (-13.90%). The stock attempted to pare some losses the following day (June 17 +6.21%) after Bank of America upgraded Azek to Buy from Neutral, noting that the stock’s valuation “has been downgraded to the building products group and the growth potential is compelling.” Since the beginning of the year, AZEK has crashed -63.73%, the most among decliners this week, and has SA Quant Rating of Sell. Wall Street analysts take a different view and gave the stock a strong buy rating, with 12 out of 19 analysts calling it a strong buy.

Terex (TEX) -16.54%. The Norwalk, Connecticut-based company, which sells cranes and other materials-handling machinery, saw a similar drop in its stock on June 13 (-7.65%) and June 16 (-8.94%), such as AZEK. Since the beginning of the year, the title has fallen -35.47%. The stock’s SA Quant rating is Hold, while the Wall Street analyst rating is Buy. SA contributor Leo Nelissen wrote in April: Terex is cyclical, and that’s great. Nelissen had said to put the stock on your watch list because further weakness in the stock price was likely, but buy when economic growth rebounds.

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