Stock futures plummeted Thursday following President Donald Trump's primetime address on the Iran conflict, which stoked escalation concerns and sent oil prices soaring by 9%. Key analyst rating changes were highlighted across multiple sectors.
Geopolitical Tensions and Market Reaction
President Trump's speech indicated the Iran conflict could last two to three weeks, with threats to bomb electricity infrastructure if no deal is reached. He urged oil-dependent nations to protect the Strait of Hormuz. This rhetoric led to a surge in U.S. crude oil benchmark WTI to $109 per barrel. The major averages had risen the previous day but lacked strong follow-through, and futures turned negative after the address.
Analyst Upgrades and Positive Revisions
- Vale: Bank of America upgraded to buy from hold, calling it an attractive entry point despite a 7% stock decline since the conflict began, while iron ore prices rose 8%.
- Cheniere Energy: Citigroup increased its price target to $330 from $280 and reiterated a buy rating, benefiting from potential long-term U.S. LNG export opportunities due to Middle East supply disruptions.
- Brinker International: KeyBanc upgraded to buy from hold, citing strong sales momentum for Chili's and upcoming product launches that should drive growth and margin expansion.
Analyst Downgrades and Target Cuts
- Wix: UBS downgraded to hold from buy, noting expected growth deceleration in its core business and vulnerability to AI disruption.
- Airlines: TD Cowen lowered price targets for United ($120 from $140), American Airlines ($15 from $17), Delta ($76 from $77), and Southwest ($46 from $56), citing skepticism over travel demand durability amid high energy prices. Buy ratings were maintained for United, American, and Delta.
- Paramount: Wells Fargo cut its price target to $8 from $10 and kept a sell rating, concerned about debt load from a potential Warner Bros Discovery merger.
- Boeing: Citi reduced its price target to $256 from $290 but maintained a buy rating, noting that aircraft orders remain intact despite stock struggles during the conflict.
Mixed Actions on Restaurant Stocks
- Cava Group: Mizuho Securities raised its price target to $80 from $72 with a neutral rating, while TD Cowen increased to $100 from $90 with a buy rating, reflecting analyst optimism after the stock's recovery from last year's lows.