Stocks Make Major Moves in Premarket Trading After Analyst Calls

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Several notable stocks made significant moves in premarket trading on Tuesday following analyst upgrades, downgrades and initiations. Cruise lines Carnival and Royal Caribbean saw shares rise after an upgrade from Truist Securities, while agricultural equipment manufacturers Deere and CNH Industrial declined on a downgrade from Evercore ISI.

The Carnival Miracle cruise ship docked in San Francisco. Cruise lines gained in premarket trading after an upgrade from Truist Securities.

Cruise Stocks Gain on Upgrades

Carnival Corporation and Royal Caribbean Cruises saw shares increase around 2% in premarket trading after Truist Securities upgraded both cruise lines. Analyst Patrick Scholes upgraded Carnival from “Sell” to “Hold” and Royal Caribbean from “Hold” to “Buy.”

Scholes cited strong booking trends for 2024 and 2025 as the reason for his increased optimism on the cruise lines. With two years still to go, Carnival and Royal Caribbean have exceptionally robust advance bookings for those years, indicating a potential rebound for the industry after struggles during the pandemic.

Norwegian Cruise Line Holdings also rose 1% on the news, despite Truist maintaining its “Hold” rating on that stock. Cruise lines were among the hardest hit during COVID-19, with health restrictions and travelers’ fears leading to cancellations. Now analysts see smoother sailing ahead.

Agricultural Equipment Makers Drop on Downgrades

Evercore ISI downgraded machinery manufacturers Deere & Company and CNH Industrial, citing expected decline in agricultural production. Deere fell 1.4% while CNH dropped 1.2% in Tuesday’s premarket session.

Analyst David Raso downgraded both stocks from “Outperform” to “In-Line,” predicting reduced income for farmers will lead to lower equipment demand. With rising costs of fertilizers and other inputs, plus adverse weather events, farmers may plant fewer acres and purchase fewer new combines, tractors and other farm gear.

This downgrade comes right before Deere announces quarterly earnings on November 23rd. Investors will be listening closely for management’s outlook on agricultural markets. But Evercore sees macroeconomic headwinds for this industry.

Starbucks Slips on Downgrade

Coffee giant Starbucks saw shares fall 1.2% after Cowen and Company downgraded the stock from “Outperform” to “Market Perform” based on growth concerns in China.

Analyst Andrew Charles thinks China’s economic slowdown and weaker consumer spending could negatively impact Starbucks. With over 5,700 stores in China, it is Starbucks’ second largest market after the U.S. Slowing store growth and traffic in China may affect Starbucks’ valuation.

Starbucks has nearly 6,000 stores in China, its second-largest market. An economic slowdown has caused one analyst to downgrade the stock.

Upgrades for CVS Health, Dell

CVS Health and Dell Technologies moved higher after upgrades from Wall Street analysts.

Evercore ISI upgraded CVS from “In-Line” to “Outperform,” saying shares are attractively valued right now. The pharmacy chain and health insurer rose less than 1%.

Meanwhile, Daiwa Capital raised its rating on computer equipment provider Dell from “Market Perform” to “Outperform.” Analyst Jason Cipriani is optimistic about Dell’s positioning in servers, software and cloud services. Dell shares were up more than 1.2%.

Super Micro Initiated at Overweight

Server and storage solutions provider Super Micro Computer gained over 2% after Barclays initiated coverage with an “Overweight” rating. Analyst Tim Long put a $327 price target on the stock, about 34% above yesterday’s close.

Long is bullish on Super Micro Computer’s growth opportunities supplying specialized IT infrastructure. He believes the company can capture significant market share.

Planet Fitness Downgraded on CEO Change

JPMorgan downgraded gym franchisor Planet Fitness from “Overweight” to “Neutral” following an unexpected CEO switch. Chris Rondeau is stepping down after leading the company for over 20 years. Analyst Christopher O’Cull thinks this increases uncertainty.

Planet Fitness shares sank about 2% on the news. JPMorgan also cut its price target from $70 to $52 per share, still 7% above Monday’s close.

Rocket Lab Plunges on Launch Failure

Aerospace manufacturer and small satellite launch provider Rocket Lab saw its stock plunge 22% after experiencing its first mission failure in over two years. An issue with the igniter system caused a recent rocket launch to fail.

This setback comes right before Rocket Lab’s next planned launch later in November. The company will need to identify the problem, fix it and resume successful launches to keep investors’ confidence.

With one analyst downgrade apiece, Starbucks and Planet Fitness slipped in early trading on Tuesday. But upgrades lifted shares of CVS, Dell and cruise lines. Looking ahead, earnings reports, economic indicators and geopolitics will continue to move these stocks and the broader market. Savvy investors should stay updated on analyst reports for timely insights.

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