Stocks are set to end the week higher, despite some gyrations Friday, amid investors’ hopes for a slowdown in Federal Reserve interest rate hikes. Equities started the week strong on confidence that inflation was cooling and on Thursday, the latest consumer price index data confirmed those expectations. However, stocks wobbled on Friday after JPMorgan Chase and Bank of America said they expected a mild recession. The S & P 500 is up about 2% for the week, while the Dow Jones Industrial Average added more than 1%. The Nasdaq is on pace for its second consecutive winning week, up more than 4% so far this week. United Airlines and American Airlines led the way higher. Two cruise lines were also among the winners, as was a media stock. Here are the top 10 gainers this week, as of 9:38 a.m. ET., according to data from FactSet. United Airlines was the clear winner this week, gaining 21%, but was followed closely by American Airlines, which rose nearly 19%. American boosted its revenue and profit estimates on Thursday for the fourth quarter, citing strong demand and high fares. The airline will report earnings at the end of the month, while United is set to announce its results on Tuesday. The one airliner that did report this week was Delta, which was up 10% for the week but not among the top 10 gainers. United Airlines has 5% upside to the average analyst price target and its stock is rated a buy by 48% of the analysts covering it. However, American Airlines average price target implies 4% downside and just 9% of the analysts covering it have a buy rating. Meanwhile, analysts expect Warner Bros. Discovery to rally almost 49%, according to the average price target. The media company, which gained 16% this week, is rated a buy by 46% of the analysts covering the stock. Earlier this week, Warner Bros. Discovery was added to Bank of America’s US1 list of best investment ideas. The Wall Street firm said it liked the company’s “long-term potential” and views the risk/reward as “highly attractive.” Two cruise lines also outperformed this week. Norwegian Cruise Lines gained nearly 18%, while Royal Caribbean rose 13.5%. The latter was upgraded by Morgan Stanley to equal weight from underweight on Tuesday. The Wall Street firm called Royal Caribbean the “superior cruise line” coming out of the Covid pandemic. “RCL looks better positioned than peers, having recovered occupancy fastest, and its superior cost control has led to a faster recovery in EBITDA (ex. fuel) vs peers,” analyst Jamie Rollo wrote in note. At the same time, Rollo downgraded Norwegian Cruise Line to underweight from equal weight, pointing to its difficulties with cost controls relative to its peers. Norwegian Cruise Line has 10% upside to the average price target, with nearly 39% of the analysts covering the stock rating it a buy. Meanwhile, Royal Caribbean has 6% upside to the average price target and a buy rating from 42% of the analysts covering the stock. Newcomer GE HealthCare Technologies was also among the winning stocks, gaining 11% this week. The stock began trading as a separate coming from General Electric on Jan. 4 as a part of the conglomerate’s plan to break up into three companies. GE will focus solely on aviation after spinning off its energy business in 2024. — CNBC’s Michael Bloom contributed reporting.
© heardonwallstreet.com