Last week’s Federal Reserve interest rate increase has thrown cold water on investor sentiment. Furthermore, with continuing geopolitical tensions and COVID-related lockdowns in China, markets might continue to founder in the coming quarters. According to analysts at Deutsche Bank, the S&P 500 is projected to decline  by 20% in 2023.

In addition, according to a recent UBS investor sentiment survey, 51% of respondents have opined that the market is more volatile than usual. So, amid widespread apprehension of a potential future recession, investors should now avoid fundamentally weak stocks.

Wall Street analysts expect J. M. Smucker Company (SJM - Get Rating), Kimberly-Clark Corporation (KMB - Get Rating), and Annaly Capital Management, Inc. (NLY - Get Rating) to plunge further in the near term.

J.M. Smucker Company (SJM - Get Rating)

SJM in Orrville, Ohio, manufactures and markets branded food and beverage products worldwide. It operates in four segments: U.S. Retail Coffee; U.S. Retail Consumer Foods; U.S. Retail Pet Foods; and International and Away from Home.

SJM’s net sales for the third quarter, ended Jan. 31, 2022, came in at $2.06 billion, compared to $2.08 billion in the prior-year period. Its gross profit was  $683.10 million, down 15.6% year-over-year. Furthermore, its net income was  $69.70 million, down 73.3% year-over-year, while its EPS decreased 72.4% year-over-year to $0.64.

Analysts expect SJM’s revenue to fall marginally in 2022. Its EPS is estimated to decline by 6.2% to $8.55 in 2022. The stock closed yesterday’s trading session at $142.50. Wall Street analysts expect the stock to hit $132.20 in the near term, which indicates a potential decline of 7.2%.

SJM’s POWR Ratings reflect its poor prospects. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

The stock has a D grade for Sentiment. Click here to access the additional POWR Ratings for SJM (Growth, Value, Momentum, Stability, and Quality). SJM is ranked #42 of 87 stocks in the Food Makers industry.

Kimberly-Clark Corporation (KMB - Get Rating)

KMB in Irving, Tex., and its subsidiaries manufacture and market personal care and consumer tissue products worldwide. It operates through three segments: Personal Care; Consumer Tissue; and K-C Professional.

KMB’s net sales increased 7.4% year-over-year to $5.09 billion for the first quarter, ended March 31, 2022. However, its gross profit came in at $1.52 billion, down 4.3% year-over-year. Also, its net income decreased 9.9% year-over-year to $535 million, while its EPS came in at $1.55, also down 9.9% year-over-year.

Analysts expect KMB’s EPS to decline by 6.3% to $5.79 in 2022. The stock missed its consensus EPS estimates in two of the four trailing quarters. The stock closed yesterday’s trading session at $138.95. Also, Wall Street analysts expect the stock to hit $132.30 in the near term, which indicates a potential decline of 4.8%.

KMB has a D grade for Sentiment. We have also rated it for Growth, Value, Momentum, Stability, and Quality. Click here to access all the KMB ratings. KMB is ranked #27 of 61 stocks in the D-rated Consumer Goods industry.

Annaly Capital Management, Inc. (NLY - Get Rating)

NLY engages in mortgage finance and corporate middle-market lending. The New York City-based firm invests in agency mortgage-backed securities; mortgage servicing rights; agency commercial mortgage-backed securities; non-agency residential mortgage assets; residential mortgage loans; credit risk transfer securities; corporate debts; and other commercial real estate investments.

NLY’s cash and cash equivalents came in at $955.84 million for the period ended March 31, 2022, compared to $1.34 billion for the period ended Dec. 31, 2021. Its total assets were  $76.19 billion, compared to $76.76 billion, for the same period in the prior year. In addition, its total liabilities were  $64.71 billion, compared to $63.57 billion, for the same period in the prior year.

Analysts expect NLY’s EPS to decrease 18.1% to $0.95 in 2022. Over the past year, the stock has declined  27.5% in price to close yesterday’s trading session at $6.62. Wall Street analysts expect the stock to hit $6.50 in the near term, which indicates a potential 1.8% decline.

NLY’s POWR Ratings are consistent with this bleak outlook. The stock has a D grade for Stability and Sentiment.

We also have graded NLY for Growth, Value, Momentum, and Quality. Click here to access all NLY’s ratings. NLY is ranked #10 of 31 stocks in the D-rated REITs – Mortgage industry.

SJM shares were trading at $144.09 per share on Wednesday afternoon, up $1.59 (+1.12%). Year-to-date, SJM has gained 6.86%, versus a -15.32% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

More Resources for the Stocks in this Article