The coronavirus pandemic has hammered the global economy since strict social-distancing measures taken across countries to contain the spread of the virus has shut down businesses. Although investors are optimistic over the reopening of economies, the optimism is unlikely to stay unless there is any drug or vaccine that will permanently beat COVID-19.
COVID-19 Alters Consumer Behavior
In the meantime, consumer behavior has changed drastically with social-distancing measures in place. People are now utilizing subscription-based virtual workout platforms at home as gyms are closed. Also, there has been surging demand for in-house entertainment alternatives and consumers are spending on redecorating their houses instead of splurging on big-ticket items. Although these behavioral changes are hurting many businesses, these have opened up opportunities for several businesses.
Stocks to Buy
Four companies have been shortlisted here, three of which sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Wayfair Inc. W, headquartered in Boston, Massachusetts, has gained 74.9% year to date. This is because many American consumers are choosing to redecorate their homes since they have little initiative to invest on high-priced items like cars amid the pandemic. Wayfair, with its global e-commerce platform and tech-driven supply chain, is well placed to deliver more than 18 million items comprising home goods products like furniture and decor.
The company, with a Zacks Rank #1, has also seen upward earnings estimate revisions for 2020 bottom line in the last 30 days.
Headquartered in Los Gatos, CA, Netflix Inc. NFLX is a leading provider of streaming services and has seen its stock price jumped 28.2% year to date. With more people staying at home, streaming could be their in-house entertainment. Thus, the #2 Ranked company is expected to witness an expansion in its subscriber base. We expect the company to see earnings growth of roughly 56% in 2020.
Peloton Interactive, Inc. PTON, headquartered in New York, has gained 46.8% year to date since consumers have chosen to exercise at home given the present scenario. Being a leading provider of interactive fitness products in North America, the #1 Ranked company saw its ending connected fitness subscribers surge 94% year over year to more than 886,100 in the fiscal third quarter ending Mar 31, 2020.
Importantly, majority of the analysts have revised upward the estimates for the company’s bottom line for fiscal year 2020 in the past 30 days.
B&G Foods, Inc. BGS, headquartered in Parsippany, New Jersey, has seen its stock price jump 27.3% year to date. This is because consumers are avoiding dine-in restaurants owing to the virus outbreak and are instead stocking up pantries. Being a leading manufacturer and distributer of shelf-stable and frozen foods, B&G Foods has been witnessing mounting demand for its products.
The stock, with Zacks Rank of 1, has also seen upward earnings estimate revisions for 2020 in the past 30 days and is likely to see earnings growth of 21.3% this year.
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Netflix, Inc. (NFLX) : Free Stock Analysis Report
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