States in the United States are gradually starting to reopen businesses after drastic closures due to the coronavirus pandemic that has brought the economy to a near standstill.
California Governor Gavin Newsom announced detailed plans for his state on Monday, announcing that some retailers deemed non-essential, such as florists, apparel, books, music, and sporting goods stores, may begin shipping on Friday. picked up.
New York, the epicenter for coronavirus in the United States, plans to reopen stores in phases, with a select few starting May 15.
Taking this into account, here are three stocks that could benefit from the reopening of the economy:
1. Starbucks
Starbucks (NASDAQ 🙂 share increased Tuesday after the coffee giant announced plans to reopen more than 85% of its US stores by the end of this week.
Initially shops will have adjusted opening hours and will only offer pickup, delivery and transit options. In early June, the company expects to have more than 90% of outlets open, albeit with limited opening hours.
The largest coffee chain in the world followed the same 'Return to Operations' plan in China, the second largest market where sales are beginning to recover. CEO Kevin Johnson said:
"The foundation of our approach comes from what we have learned in China, where over 98% of our stores are now open and operating according to revised protocols."
Starbucks also benefits from a scandal plaguing its largest rival in China, Luckin Coffee (NASDAQ :), located both in its home market and in the United States for allegedly manufacturing over $ 300 million in sales from 2019.
Seattle-based Starbucks suffered sales of nearly 50% in its inventory from January to the end of March, bringing prices back to 2018 levels. Despite a significant drop in lows, stocks are still down 17% in 2020.
The company's expectations when it reported its first quarter results on April 28. It expects the negative impact of the coronavirus pandemic to increase in the second quarter before it will subside in the third quarter.
2. MGM Resorts International
MGM Resorts International (NYSE 🙂 operates the largest number of properties on the Las Vegas Strip, including Bellagio, Mandalay Bay, MGM Grand and Park MGM.
The stock of the gaming and accommodation giant has made an impressive recovery from the lows seen during the peak of the coronavirus selloff in March, recovering an astounding 140% over the past six weeks. Despite the recent rebound, the stock has still fallen by 57% in the year to date and earnings have been released on April 30.
While it remains unclear when Nevada casinos and hotels will be allowed to reopen, some resorts on the Las Vegas Strip plan to open on May 25.
In the company's post-profit call, Chief Executive Bill Hornbuckle explained the gradual relaunch plan, saying that once the Las Vegas Strip is approved to begin operations, MGM will open a few casinos, including the mid-price New York-New York Hotel & Casino and the luxury Bellagio.
The company will develop security measures that will be implemented in a plan to be released later this month.
Hornbuckle explained:
"Consumer confidence is key to economic recovery, and well thought-out reopening strategies are vital to build public confidence."
Corey Sanders, MGM's financial director, noted that half of the traffic to Las Vegas comes from cars, a way of traveling considered safer than flying amid COVID-19- fears. Sanders further said that the casino and hotel operator expects "pent-up demand" in the coming months.
3. TJX Companies
The last name to consider when the economy reopens is the inexpensive retailer TJX Companies (NYSE :), which owns TJ Maxx, Marshalls and Home Goods brands.
The chain, which offers a wide selection of well-known designer brands at a significant discount, is likely to benefit from the end of the stay-at-home measures as consumers migrate to retailers looking for value, especially in light of still widespread unemployment and the recession that is currently hitting global economies.
That should help TJX get back on track when normal business returns, as the business model relies heavily on customers visiting the stores.
The stock, which fluctuated at $ 48.17 last night, has managed to rally 47% since dropping to more than five years in March, but has declined 21% so far this year .
The Framingham, MA-based clothing and home accessories retailer, with a total of 4,412 stores in nine countries – including the US, Canada, the UK, Ireland, Germany, Poland, Austria, the Netherlands and Australia – is expected to be ahead of the opening bell on Tuesday, May 19. According to consensus estimates, the retailer should make a profit of $ 0.05 per share on revenues of $ 6.22 billion.
"Stores outside the mall are likely to benefit from reopening early as consumers avoid busy shopping centers," said a recent report by Bank of America analysts. That should be good for the discount store.
