Actions to watch after the vaccine –

Actions to watch after the vaccine

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A year after Covid-19 reordered global markets, sparking a brutal sell-off of many stocks and creating new lock favorites, the prospect of a vaccine-driven revival is turning the tide for the pandemic’s main laggards.

Rebounds in stocks, which were hit the hardest in the early days of the crisis, have helped benchmark equity indices around the world move closer to all-time highs. The tastes of the European tour operator TUI AG and owner of a US shopping center. Simon Property Group Inc. are among those that have recovered the strongest.

“There is great opportunity in those laggards,” said Hani Redha, a portfolio manager at PineBridge Investments, referring to stocks in airlines, cruise ship operators and hotels. “We are on the more optimistic side that there will be much more normalcy coming back sooner than you think.”

Growing optimism among investors about the end of months of lockdowns and travel restrictions can also be seen in the recent underperformance of stocks that were among the top winners from the pandemic. The likes of Zoom Video Communications Inc. and Germany Delivery Hero SE, which skyrocketed as the coronavirus took hold and changed the way we all live, is now a bit off its peak valuations.

The fate of the populations most exposed to the pandemic depends, of course, on the virus and on the speed and effectiveness of the launch of the vaccine. The possibilities are shown below, broken down by sector.

Actions to stay at home

The hottest trade of 2020 has lost some of its luster in recent months as investors seek cheaper valuations and higher growth expectations in other industries. Actions of companies like Zoom, Netflix Inc. and Inc. has lagged behind the overall market since late October.

Amazon, Zoom and Netflix have lagged behind the S&P 500 since late October

Wall Street estimates haven’t budged for Zoom in months and the stock is trading about 27% below its 2020 peak. Amazon has stalled since September, with news of rising sales and earnings. causing shrugs from analysts.

There are similarities in Europe. Delivery Hero is approximately 16% below January’s peak, while France’s Ubisoft Entertainment SA and UK Online Store Ocado Group Plc has backed down after the results did not provide new catalysts.

But some of the region’s pandemic winners have continued to prosper, suggesting a more selective approach among investors. Signature of payments Adyen NV, which increased more than 160% in 2020, and the Swedish online casino operator Evolution Gaming Group AB, which nearly tripled last year, has continued to break records almost daily. German Meal Kit Company HelloFresh SE is another that has expanded earnings in 2021.

From worst to first: 2020‘s Nikkei Stock losers are 2021‘s Winners

“We will never go back to where we were before the pandemic,” said Alasdair McKinnon, senior manager of the Scottish Investment Trust, citing those who have flourished as a result of working at home, online shopping and the demand for home entertainment equipment. home. . “But I think we have seen the absolute best conditions that you could get for these businesses.”


Investors are betting that increased demand from online shoppers will survive the pandemic, with digital-only retailers such as Etsy Inc. and EBay Inc. in the US and Asos Plc in the UK will continue to outperform in 2021.

But, according to Bloomberg Intelligence analyst Poonam Goyal, apparel retailers like Urban Outfitters Inc. and department stores like Kohl’s Corp. has an opportunity to regain some of the market share lost to e-commerce as in-store traffic begins to rebound later in the year. Both stocks have gained more than 18% this year, outperforming the S&P 500 index, while Europe’s Hennes & Mauritz AB is up 9.9% to trade at a nearly 12-month high.

Boom online

Ecommerce stocks from the US and Europe continue their momentum in 2021

Source: Bloomberg

Reducing competition for brick-and-mortar stores after some stores shut down during the pandemic is likely to benefit brands such as Associated British Foods Plc’s Primark, said Alan Custis, UK equity director at Lazard Asset Management LLC. He expects consumers to want to go to stores after lockdown restrictions are eased.

“People still enjoy the real shopping experience, despite the fact that we know that online has grown a lot during this pandemic,” Custis said.

Travel and leisure

The travel and leisure sector has made a comeback, but many groups, such as airlines and movie theater chains, remain well below pre-pandemic levels.

One of the best performers has been Live Nation Entertainment, which has gained more than 80% since the end of October and is trading at a record high. Investors are betting that pent-up demand will lead to an increase in revenue and profits, although some Analysts have warned that valuations could be too frothy.

In Europe, optimism about the resumption of travel and tourism has helped the actions of InterContinental Hotels Group Plc and budget airline Ryanair Holdings Plc recovers all of its pandemic losses. Analysts at Morgan Stanley this week raised price targets for InterContinental among other European leisure stocks, pointing to stifled demand for travel.

Ryanair and IHG return to pre-pandemic levels


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