Two aerospace stocks are overbought and could be ready to pull back
GE Aerospace and Howmet Aerospace are vulnerable to pullbacks after entering deep overbought territory this week. Each stock climbed more than 3% this week, outperforming the S & P 500 ‘s 1.5% gain in the same period. The stocks have come so far so fast that now GE Aerospace and Howmet have the two highest 14-day relative strength index, or RSI, readings in the S & P 500. CNBC Pro used its stock screener tool available for subscribers to find the most oversold stocks as measured by the 14-day RSI. Stocks that have a 14-day RSI above 70 are viewed as overbought, leaving them susceptible to a decline, while those a 14-day RSI below 30 are often thought of as oversold, suggesting they may see a bounce. GE Aerospace has now risen for nine straight weeks, while Howmet has advanced for seven. GE Aerospace is ahead more than 53% year to date, while Howmet is up more than 60%. While the typical analyst polled by LSEG has buy ratings on both companies, the consensus 12-month price target foresees more than 5% downside for each stock over the next year following these big runs. Here’s the full list of S & P 500 stocks with the highest 14-day RSIs, along with what Wall Street thinks of them, according to LSEG data as of Friday morning: At the other extreme, Brown-Forman is the most oversold name in the S & P 500 with a 14-day RSI below 22. Shares of the Jack Daniel’s whiskey distiller tumbled nearly 16% this week. Much of the decline came after Brown-Forman posted revenue and net income for its fiscal fourth quarter that missed analysts’ consensus forecasts, according to consensus LSEG numbers. The Louisville-based company said it was operating in an “exceptionally challenging macroeconomic environment.” The stocks has slumped 37% in the past six months and is on pace to record its fifth consecutive down year. Although Wall Street analysts rate Brown-Forman no more than a collective “hold,” the consensus 12-month price target as compiled by LSEG suggests shares may rally 35%. Brown-Forman also has a dividend yield of 3.32%. Here are the other stocks with 14-day RSIs below 30, along with what Wall Street sees for them:
