Hot stocks: Travel stocks are falling; AMEH, FREY rise in promotions; SHC Drops XPEV Low Kits

Major US stock averages fell on Wednesday after the announcement of the latest interest rate hike from the Federal Reserve. Fears that the Fed could push the economy into recession led to a 1.7% drop in Standard & Poor’s 500.

Amid this downturn, travel stocks were hit particularly hard. With investors worried about demand in a fragile economic environment, American Airlines (AAL), United Airlines (UAL), Delta Air Lines (DAL), Carnival (CCL) and Royal Caribbean Cruises (RCL) all lost.

A notable loser was Sutera Health (SHC), adding to recent weakness as analysts reacted to the latest legal setback. Meanwhile, selling pressures among Chinese electric vehicle shares drove XPeng (XPEV) to a 52-week low.

Looking to the upside, Apollo Medical Holdings (AMEH) and FREYR Battery (New York Stock Exchange: Fry) Both rose on separate positive analyst comments.

Sector in focus

As the Federal Reserve raised interest rates again and indicated that the rate hike is likely to continue into 2023, concerns about the global economy are putting pressure on travel stocks.

The slide included big-name airlines. American Airlines (AAL) shares are down more than 5%, while United Airlines (UAL) and Delta Air Lines (DAL) are down more than 4%.

Cruise operators were also among the notable losers. Carnival (CCL) recorded a decrease of about 7%. Royal Caribbean Cruises (RCL) was also weak, down nearly 6%.

Jenner’s Stand

A bullish analyst took in the encouraging buying at Apollo Medical Holdings (AMEH). Shares jumped nearly 7% after William Blair began coverage of the healthcare management company with an Outperform rating.

AMEH ended Wednesday’s trading at $41.71, up $2.57 on the day. The stock has seen big volatility in 2022, falling from a level above $67 at the start of the year to a 52-week low of $29.52 reached in May.

The shares hit a 52-week high of $133.23 in November. Over the past 12 months, the stock is down nearly 54%.

Retracted standout

Sotera Health (SHC) has seen a sell-off after a legal setback raised analysts’ doubts about the company’s near-term future. Shares are down 11%.

Early this week, stocks plunged after a jury in Illinois found a sterilization service provider’s Sterigenics unit was responsible amid allegations of alleged carcinogenic emissions from one of its facilities. The company was ordered to pay $363 million.

In response to the jury’s decision, JPMorgan lowered its rating on SHC to Underweight from Overweight. “With more than 700 individual lawsuits remaining, we see risk tilting to the downside for our coverage universe,” JPMorgan analysts, led by Casey Woodring, said in a note.

SHC stock fell 88 cents to $7.32. The slide is added to the sale that occurred earlier this week when the jury award was first announced. The stock is now down 61% over the past month.

new high note

The analyst’s positive comment sent FREYR Battery (FREY) up 17%, with the stock hitting its highest level since it went public through a SPAC deal in mid-2021.

Morgan Stanley, a manufacturer of rechargeable lithium-ion batteries for electric vehicles, has been described as the best overall pick in the segment. While on the call, analyst Adam Jonas highlighted data points such as binding purchase agreements and equipment orders.

FREY closed the session at $15.39, a gain of $2.25. During the day, the shares reached a 52-week high of $15.95. Overall, the stock is up from a 52-week low of $6.42 in late June.

Noticeable new drop

XPeng (XPEV) fell to a new 52-week low, weighed down by a general slide in electric vehicle shares in China. XPEV shares are down 12% on the day.

XPEV fell $1.84 to end the session at $14.09. The stock also touched a 52-week low of $13.92. The decline extended the slide that had characterized the past few months. Shares are down 60% since their closing price on June 24.

Wednesday’s decline came in the context of a decline in the public sector. Nio (NIO) decreased by about 10%, while Li Auto (LI) decreased by 9%.

To see more of the best and worst performing stocks on Wall Street, head over to our Find Alpha on the Move section.

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