Wall Street is completely divided on these names
September has been living up to its reputation as a historically volatile month for trading , and Wall Street is divided on where some stocks will head from here. Knowing where the disagreement is can help investors navigate these choppy waters. Take the Federal Reserve’s interest rate decision on Wednesday. Debate raged over which way the central bank’s Federal Open Market Committee would lean until the very moment the vote was announced. Many economists were anticipating a 25 basis point reduction in the key overnight borrowing rate, but the odds on the CME Group’s FedWatch gauge were pricing in a greater probability of a larger 50 basis point reduction. Ultimately, the market was right . With this in mind, CNBC Pro screened for stocks that are most controversial on Wall Street, abiding by the following criteria: A member of the S & P 1500 Composite Index Market cap of at least $5 billion At least 20% of analysts maintain positive ratings At least 20% of analysts maintain negative ratings Tesla made the list. Forty-one percent of analysts polled by FactSet have a buy rating on Tesla stock, while 21% have a sell rating. Their average target price implies more than 5% downside for the stock. It has been a volatile year for the electric vehicle maker, with shares trading as high as $273.93 and as low as $138.80. Right now, shares have pulled back 9% year to date. The stock has been pressured by steep price cuts that extend back to 2023 and investor worry over squeezed profit margins. EV adoption has been sluggish, which is a broader challenge facing many of the top U.S. automakers. “We see incremental headwinds to Pricing in Q3, as TSLA stepped-up its incentives. We’d especially highlight the US, where the combination of extended low-cost financing on Model Y (1.99% APR since late-July; 5.6% ex-this offer) and similar deals for most Model 3 customers equates to a ~$4,500/vehicle net pricing headwind,” Wolfe Research’s Emmanuel Rosner wrote Wednesday ahead of the company’s third-quarter results on Oct. 16. Rosner maintains a peer perform rating on Tesla stock, but does not have a price forecast. TSLA YTD mountain Tesla stock. Morgan Stanley analyst Adam Jonas, who maintains an overweight rating and a $310 price target, said Wednesday that the company’s robotaxi event may be setting expectations too high for investors. “Heading into Tesla’s ’10/10′ robotaxi event we are, frankly, struggling to see how the day can live up to investors’ high expectations,” Jonas said. His price target implies roughly 36% upside. CEO Elon Musk has touted the event on social media site X as possibly the most noteworthy moment for the company since it unveiled the Model 3 sedan in 2016. IBM also made the cut. Shares have advanced more than 31% in 2024, but opinions are divided about future gains. About 43% of analysts surveyed by FactSet maintain a buy rating on IBM stock, but 21% are at a sell. Bernstein’s Toni Sacconaghi, who has a market perform rating on the stock with a $185 per share price target , attributed IBM’s market share losses in 2024 to its outsized exposure to parts of the data storage market that take longer to grow and are more expensive as a result. “We believe the main drivers of share losses are 1) limited success in selling outside their existing customer bases; 2) lagging technology innovation; and 3) platform complexity,” Sacconaghi said. He also noted that the risk-to-reward skew on IBM stock is more balanced, leaving less upside for the stock. IBM YTD mountain IBM stock. Goldman Sachs recently added IBM to its conviction list with a $220 price target, or 2% above where shares closed Wednesday. “IBM is on track to complete its pivot to long-term growth driven by stronger software performance and market share gains in consulting — a combination which should drive upside to earnings and multiple expansion,” analyst Jim Schneider wrote in a Sept. 3 note. Other stocks on the list include cloud storage company Dropbox and Pepperidge Farm owner Campbell Soup .
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