Analysts upgrade defensive stocks, including Procter & Gamble and Northrop Grumman, as coronavirus shutdown is extended

Key Points
  • Jefferies upgraded Procter & Gamble and Kimberly-Clark to buy from hold.
  • Bernstein upgraded Northrop Grumman to outperform from market perform.
  • BMO upgraded Alphabet to outperform from market perform.
  • Wells Fargo upgraded Nike, Canada Goose, Ulta and TJX Companies to overweight from equal weight.
  • Raymond James upgraded Amgen to outperform from market perform.
  • RBC downgraded Marriott to sector perform from outperform.
  • Goldman Sachs upgraded Sherwin Williams to buy from neutral and added it to the firm's conviction buy list.
  • Gordon Haskett downgraded 3M to underperform from hold.
  • Berenberg upgraded Hostess Brands to buy from hold.
  • Stifel upgraded Mondelez to buy from hold.
Scott Mlyn | CNBC

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As the coronavirus pandemic worsens, Wall Street analysts continue to recommend clients buy defensive stocks.

Monday's upgrades include Procter & Gamble, Hostess Brands, Northrop Grumman, Amgen and more. 

Here are the biggest calls on Wall Street on Monday:

Jefferies upgraded Procter & Gamble and Kimberly-Clark to 'buy' from 'hold'

Jefferies said P&G and Kimberly-Clark were near-term beneficiaries of "pantry loading" due to the coronavirus.

"Near-term beneficiary from pantry-loading in the US offers high EPS visibility for KMB: Owing to much discussed pantry-loading, we forecast +LDD % org sales growth in the co.'s US biz in 1Q and < 7% overall. As mentioned for P&G, while clearly transitory, the dynamic provides a level of earnings visibility which is absent from more discretionary/ susceptible parts of the US economy. ...  P&G is driving broad-based portfolio strength heading into the likely recession, including 5% org sales since CY3Q18, market share strength across geos/ categories, and +17.5% FX neutral EPS growth. Multi-year strategic investments have clearly been validated, mgmt. is second to none, consumers will increasingly seek P&G's leading/trusted brands in uncertain times, and the co.'s global scale places it among the best in staples to weather near-term macro headwinds.

Bernstein upgraded Northrop Grumman to 'outperform' from 'market perform'

Bernstein said in its upgrade of Northrop Grumman that the defensive company may benefit in an economic downturn.

"Defense historically outperformed the market in economic downturns. We have not yet seen this in the coronavirus downturn. We believe the opportunity remains, with defense fundamentals relatively unaffected. We update our view on defense, including an upgrade of Northrop Grumman to Outperform. We lower targets with a lower market multiple. Opportunities among defense stocks are not uniform. We rate L3Harris Outperform and add Northrop Grumman, now that it is less expensive. We continue to rate the other defense primes Market Perform. We prefer companies at this stage with exposure to space, C4I, hypersonics, as well as the O&M budget. We also see more risk in Middle East sales."