Despite the coronavirus pandemic causing unprecedented financial disruptions and a major shift in the lives of American consumers, a slowdown in new cases has made Wall Street more optimistic about eventually reopening the economy— and here are 19 stocks poised to thrive in the post-coronavirus world once widespread quarantine orders are lifted, according to analysts at Stifel and Barclays.
Both firms recommend big box retailer Walmart, which is well-positioned to capitalize on the growth of e-commerce—particularly the increase in online grocery shopping—during coronavirus. The stock is up almost 9% so far in 2020.
Consumers have been relying on online deliveries from shipping giant Amazon, which has seen its shares rise more than 25% this year, more than ever: The prolonged nature of the pandemic is likely to “accelerate long-lasting e-commerce adoption,” according to Stifel. The company’s cloud software offering, Amazon Web Service, will also benefit from increasing work-from-home trends.
Stifel also highlights Salesforce as another top pick, thanks to its broad suite of cloud-based corporate solutions—some of which give it the ability to “outperform going into a recession.”
Microsoft, whose shares have jumped almost 9% so far this year, will also emerge stronger after the pandemic , thanks to its growing platform of productivity and service offerings. Stifel expects Microsoft’s cloud service, Azure, to become its largest revenue stream in the coming years.
As most young people at home spend an increased amount of time using social media, stocks like Snapchat and Facebook are poised to benefit, Stifel says. In the same theme, the firm recommends Spotify as “arguably the best pure play on the secular shift toward digital audio consumption.”
Once the country does reopen, people will be able to get back to sports and outdoor activities: Stifel likes athletic apparel maker Nike, which continues to grow its digital presence, and indoor exercise bike maker Peloton, which can benefit from its industry-leading position in at-home fitness.
One area that could see a major change in consumer habits is in cosmetics and personal care, according to Barclays. Companies like Coty and Estee Lauder are likely to benefit from a rise in “DIY beauty experiences” at home.
Another stock that could rebound in the post-coronavirus world is Wendy’s, which was “already focused on building a comprehensive digital platform” before the crisis began and could benefit as a result, according to Stifel.
The firm also recommends Home Depot, which should benefit from consumers who are spending more time at home and increasingly taking on home improvement projects.
As social distancing occurs around the country, more people are turning to video games, which are being played at record levels. Stifel’s top picks in this space include Take-Two Interactive and Electronic Arts, as well as Activision Blizzard—with its massively popular Call of Duty franchise.
As home builders see demand rebound after the pandemic, housing company D.R. Horton could benefit from that dynamic, according to Barclays.
Stifel likes Delta, which has “less exposure to typical airline competition” and whose financial position is “among the best” in the industry.
The firm also highlights Waste Management, which is making technological advances for its fleet that could result in up to $150 million of cost savings over the next three years.
“At the core, we believe the U.S. consumer could emerge from the pandemic more mindful, resourceful, and cost-conscious,” Barclays analysts said in a recent note.
Although market uncertainty due to the pandemic still remains high, “we know that optimism and prosperity will eventually prevail,” Stifel analysts similarly wrote.
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