Five stocks stand out heading into Tuesday, October 27, 2026, each backed by a bullish rating change issued on Monday, October 26. Stocks closed lower on October 23 as oil climbed. The S&P 500 fell 0.52% to 7,623.68, the Dow Jones Industrial Average dropped 1.23% to 52,215.16, and Brent crude settled at $116.72 a barrel. Buyers returned on October 26 as oil eased. By 10:55 a.m. ET, the S&P 500 was up 0.9% and the Nasdaq 100 was up 1.3%, while the 10-year Treasury yield slipped to 4.98%. The Federal Reserve meets on October 27-28, and traders widely expect it to hold rates. Visa, Coca-Cola, and Boeing report on October 27, Microsoft and Alphabet follow on October 28, and Amazon reports on October 29.
The five ideas below span defense, discount retail, fitness clubs, utilities, and optical networking. Editorial notes only, not investment advice.
Lockheed Martin (LMT) – Morgan Stanley Upgrades the Defense Giant
Lockheed Martin was upgraded from Equal-Weight to Overweight on Monday by Morgan Stanley analyst Kristine Liwag, who raised her price target to $835 from $690. That new target is the highest on the panel. Lockheed builds the F-35 fighter jet, missiles, missile defense systems, helicopters, and satellites for the U.S. and allied governments. In our view, higher defense budgets at home and abroad, along with strong demand for missiles, support Lockheed's growth.
Shares traded near $631.21 during Monday's session, up about 4.47%, giving Lockheed a market capitalization near $146 billion. The 52-week range runs from $437.25 to $692, the trailing price-to-earnings multiple is 22.43, and the dividend yield is near 2%.
This is a contrarian call. Consensus reads buy, but only six of 13 tracked firms are bullish, with six neutral and one bearish. The average price target of $631.08 sits right at the share price, while the Morgan Stanley target implies about 32% upside. UBS's Gavin Parsons raised his target to $692 on October 23.
Risks: JPMorgan's Seth Seifman held Neutral on October 26 while raising his target to $665. Program cost overruns, delays in government budgets, and execution on fixed-price contracts remain factors to monitor.
Ross Stores (ROST) – UBS Upgrades the Off-Price Retailer
Ross Stores was upgraded from Neutral to Buy on Monday by UBS. Ross runs Ross Dress for Less and dd's DISCOUNTS stores, which sell brand-name clothing and home goods at prices below department stores. In our view, shoppers looking for value tend to favor off-price chains when budgets get tight, which helps Ross in a high-inflation economy.
Shares traded near $234.56 during Monday's session, up about 2.29%, giving Ross a market capitalization near $75 billion. The 52-week range runs from $157.39 to $257, the trailing price-to-earnings multiple is 28.38, and the dividend yield is near 1%.
Consensus reads strong buy, with 12 bullish and four neutral ratings among 16 tracked firms. The average price target of $256.25 implies roughly 9% upside. Truist's Joseph Civello raised his target to $310 on August 21.
Risks: Four firms rate the stock neutral. Tariffs on imported goods, the supply of excess brand-name inventory, and competition from TJX and Burlington remain factors to monitor.
Life Time Group (LTH) – Barclays Initiates the Fitness Club Operator at Overweight
Life Time Group was initiated with an Overweight rating on Monday by Barclays. Life Time runs large, upscale athletic country clubs across the U.S. and Canada, with gyms, pools, pickleball courts, spas, and cafes. Members pay monthly dues, which gives the company steady revenue. In our view, consumers' growing focus on health and wellness supports demand for premium clubs like Life Time's.
Shares traded near $44.37 during Monday's session, up about 5.82%, giving Life Time a market capitalization near $9.9 billion. The stock sits near its 52-week high of $47.24 and well above its low of $24.14. The trailing price-to-earnings multiple is 24.38.
Consensus reads strong buy, with all 10 tracked firms bullish. The average price target of $54.60 implies roughly 23% upside. Oppenheimer's Brian Nagel raised his target to $60 on June 25.
Risks: Building new clubs is expensive, and the company carries debt. A slowdown in consumer spending, membership cancellations, and high interest rates remain factors to monitor.
FirstEnergy (FE) – BMO Initiates the Utility at Outperform
FirstEnergy was initiated with an Outperform rating on Monday by BMO Capital. FirstEnergy owns electric utilities that deliver power to customers in Ohio, Pennsylvania, New Jersey, and other states. In our view, rising electricity demand from data centers and new investment in the power grid give FirstEnergy steady rate-base growth, while its dividend adds income.
Shares traded near $46.09 during Monday's session, down about 0.12%, giving FirstEnergy a market capitalization near $27 billion. The 52-week range runs from $42.67 to $52.34, the trailing price-to-earnings multiple is 24.58, and the dividend yield is near 4%.
Consensus reads buy, with five of nine tracked firms bullish and four neutral. The average price target of $51.56 implies roughly 12% upside. Morgan Stanley's David Arcaro kept his Overweight rating and raised his target to $50 on October 21.
Risks: JPMorgan's Jeremy Tonet held Neutral and cut his target to $50 on October 19, and Barclays' Nicholas Campanella trimmed his target to $49 on October 12. Regulatory rate decisions, high interest rates, and storm costs remain factors to monitor.
Lumentum (LITE) – StoneX Initiates the Optical Networking Supplier at Buy
Lumentum was initiated with a Buy rating on Monday by StoneX. Lumentum makes lasers and optical parts that move data at high speed through fiber-optic cables, including inside AI data centers. In our view, AI computing clusters need faster connections between chips and servers, and optical links are central to that buildout.
Shares traded near $834.71 during Monday's session, up about 10.39%, giving Lumentum a market capitalization near $76 billion. The 52-week range runs from $184.20 to $1,143. The reported price-to-earnings multiple is not meaningful.
Consensus reads buy, with 10 of 14 tracked firms bullish and four neutral. The average price target of $1,035.57 implies roughly 24% upside. Jefferies' Blayne Curtis raised his target to $1,250 on October 21.
Risks: The stock is highly volatile and trades well below its 52-week high. Reliance on a few large customers, competition from other optical suppliers, and any slowdown in AI spending remain factors to monitor.
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