- Within the next six to eight weeks, the world could be moving closer to a major COVID-19 vaccine development, according to Stifel.
- Leading up to a potential COVID-19 vaccine announcement, investors should have exposure to gaming and leisure stocks that would benefit from a vaccine.
- These are the six gaming and leisure stocks that Stifel says to buy ahead of a COVID-19 vaccine announcement.
- Visit Business Insider’s homepage for more stories.
While it’s impossible to predict, Stifel thinks the world is six to eight weeks away from a positive COVID-19 vaccine announcement.
In a note published on Wednesday, Stifel said the stocks poised to sharply benefit from a COVID-19 vaccine can be found in the gaming and leisure sector.
And even though a vaccine may not be available to the public until the middle of 2021, investors will likely write off 2021 and focus more on 2022 as the world gets back to normal, Stifel said.
More than any other industry, cruise stocks are poised to surge the most, Stifel said, each cruise stock is still down on average 55% since mid February when the pandemic induced market sell-off began.
Here are the six gaming and leisure stocks to buy ahead of a potential COVID-19 vaccine development, according to Stifel:
The CEO of a $US1 billion ETF provider explains how the COVID-19 crisis completely upended investors’ most reliable sources of steady returns – and shares where to find income as dividends and bond yields dry up
Ticker: LVS Price target: $US64 (28.5% upside potential)
A vaccine should allow a quicker return to normal for Macau, and there is likely pent-up demand for Singapore operations as air traffic improves, according to Stifel. Additionally, the Las Vegas strip recovery is “highly dependent” on a vaccine. A vaccine would also help hasten the reopening of conferences in Las Vegas, which would benefit the company, Stifel said.
Ticker: SEAS Price target: $US24 (23% upside potential)
SeaWorld’s Orlando and San Diego locations will likely experience pent-up demand shortly after a vaccine is online, according to Stifel. The company will also come out on the other side of the pandemic as a leaner, more profitable company, the note said.
Ticker: CZR Price target: $US63 (41% upside potential)
In addition to the Las Vegas strip recovery and conference gatherings being highly dependent on a vaccine, regional strength in Caesars’ business should continue as capacity constraints are removed, Stifel said. New M&A opportunities should also present themselves sooner due to the pandemic, according to the note.
Ticker: CCL Price target: $US24 (49% upside potential)
Carnival should emerge from the pandemic as a leaner, more profitable company, as the age of the company’s fleets is reduced and older capacity is retired, Stifel said. The firm expects significant pent-up demand across a number of Carnival’s brands, and less capacity going forward could help yield growth, according to the note.
Ticker: OSW Price target: $US10 (65% upside potential)
OneSpa operates health and wellness centres onboard cruise shops and doesn’t have the responsibility of filling up ships. It should benefit from a captive audience once cruise ships are back online, and passengers will likely have a surplus of credits to spend given all the recent promotions, Stifel said.
Ticker: LIND Price target: $US12 (46% upside potential)
Stifel posited that Linbald’s small ship fleet should be a benefit for the company, and the wealthy and older generation it caters to will likely emerge from the pandemic unscathed from an economic standpoint. The firm expects strong demand from consumers once a COVID-19 vaccine is dispersed, according to the note.
David Baron’s fund has returned 400% to investors in the last decade using 20 stocks or less. He shared with us the 3 stocks he snapped up in 2020 – and the 3 travel and entertainment bets he loves going forward.
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