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UBS: Buy these 14 back-to-normal stocks now before a a??sharp accelerationa?? in consumer spending in Q2 as vaccinations pick up

UBS: Buy these 14 back-to-normal stocks now before a a??sharp accelerationa?? in consumer spending in Q2 as vaccinations pick up

Travelers queue during the Thanksgiving holiday travel rush at O'Hare Airport in Chicago, Illinois, U.S. November 27, 2019.
Kamil Krzaczynski/Reuters




As more COVID-19 vaccines are administered, the end of the pandemic looks increasingly in sight.




Stimulus checks are already helping to lift consumer spending.




UBS analysts compiled a list of 14 buy-rated stocks set to benefit from the economy's reopening.




Visit the Business section of Insider for more stories.


Increasingly, it looks like the end of the pandemic is in sight.President Joe Biden said on Tuesday that the US will have enough COVID-19 vaccine doses to vaccinate every American adult by the end of May. Governors are also starting to ease or fully rescind restrictions as vaccinations increase.When the economy fully reopens, consumers will be well-equipped. The share of their savings compared to post-tax incomes - the personal saving rate - was 20.5% in January, the highest level since May 2020 and World War II before then. That's thanks to muted economic activity and strong fiscal stimulus efforts, with another $1.9 trillion package expected to come in the weeks ahead, having already been passed by the House of Representatives. Also, consumer spending jumped to a seven-month high in January as personal incomes rose."The capacity for US consumers to spend is massive and growing," UBS Chief US Equity Strategist Keith Parker said in a February 25 note.To help investors capitalize on the "sharp acceleration" in spending that the bank expects, its analysts pulled out 14 stocks tied to consumer spending and which they assign a "buy" rating.The stocks come from the transportation, retail, real estate, healthcare, food and beverage, consumer services, and media and entertainment industries. Parker said that services industries and the healthcare industry haven't yet enjoyed the upside other sectors have, and their forward earnings expectations are lower.
UBS: Buy these 14 back-to-normal stocks now before a a??sharp accelerationa?? in consumer spending in Q2 as vaccinations pick up


UBS

But he said there's a chance these industries recover more quickly than the market expects, leaving investors with a potential opportunity."Compared to consensus forecasts the market has baked in higher earnings for manufacturing sectors relative to services," Parker said in the note. "We estimate that there could be 30% and 14% upside for Airlines and Hotel and Leisure respectively if earnings return to 2019 levels by 2023."The 14 stocks buy-rated are listed below in descending order of their market caps.

1. Walt Disney

UBS: Buy these 14 back-to-normal stocks now before a a??sharp accelerationa?? in consumer spending in Q2 as vaccinations pick up


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