The worst of the pandemic is perhaps behind us, but many 2020 issues remain, making the stock market outlook uncertain, at least for this month. Rising COVID-19 infections, a slower-than-anticipated vaccine rollout and rising unemployment are some of the key issues that will likely keep the markets volatile. Also, because January as the month in which fourth-quarter earnings are reported , investors will likely wait for some positive corporate results before making any heavy bets on stocks.
But while the overall outlook for January remains uncertain, there are certain companies that are likely to perform well based on investor optimism about their rebound potential with a vaccine-driven economic recovery. These companies were hard hit by the pandemic and are now setting up to rebound with expected increases in demand this year.
Starbucks Corporation (SBUX), Uber Technologies, Inc. (UBER), and Las Vegas Sands Corp. (LVS) are three such stocks that are on a steady path to recovery. So, these companies could be good additions to your portfolio now.
Starbucks Corporation (SBUX)
SBUX operates a chain of beverage and fresh foods outlets around the world. The company is a retailer of specialty coffee, tea, and other beverages. Over the past year, SBUX has gained 17.2%.
The company recently partnered with Microsoft Teams to introduce a feature that allows users to send Starbucks eGift cards to others through the platform. SBUX has also upgraded its rewards program. Allowing members to now scan their Starbucks app and pay for r items through cash, credit/debit cards, or selected mobile wallets.
For the quarter ended September 30, 2020, the company reported an increase of 10% in Active Starbucks Rewards Membership in the United States. The company also opened 480 net new stores during the quarter.
SBUX is expected to see revenue growth of 11.6% for the quarter ended March 31, 2021 and 21.2% in 2021. The company’s EPS is estimated to grow 141% in 2021 and at a rate of 49.7% per annum over the next five years.
How does SBUX stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #1 of 53 stocks in the Restaurants industry.
Uber Technologies, Inc. (UBER)
UBER operates a platform that allows users to call for cabs, request delivery of food, and other related services. The company has operations in the United States and internationally. UBER’s stock has returned 56.6% over the past year.
UBER recently upgraded Uber Connect, which will now allow users to deliver packages in 2400-plus new cities in the United States. UBER has also revamped its rewards program by introducing new redemption options and extending the period for redemption.
For the quarter ended September 30, 2020, UBER saw a 125% increase in delivery revenue year-over-year. Its net loss attributable to the declined 6% compared to the same period last year.
UBER’s revenue is estimated to increase 9.5% in the quarter ended March 31, 2021 and 42.1% in 2021. The company’s EPS is expected to rise 59.2% in 2021 and 65.5% per year over the next five years.
UBER’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade and Buy & Hold Grade.
Las Vegas Sands Corp. (LVS)
LVS develops and operates integrated resorts in the United States and Asia. The company’s resorts feature accommodation, gaming, entertainment, restaurants, and other amenities. LVS’ stock price has increased 26.7% over the past three months.
LVS is reportedly in talks to venture into sports betting through its casinos which could prove lucrative for the company. The company may also diversify its services by venturing into online wagering.
For the quarter ended September 30, 2020, the company was reeling from the effects of the coronavirus on the travel and tourism industry and reported a decrease in net revenue of 82%. However, LVS is continuing to invest in its properties in Macao, Marina Bay Sands, and Las Vegas, which could drive growth once the market recovers.
LVS’s revenue is expected to grow 11.8% for the quarter ended March 31, 2021 and 170.9% in 2021. The company’s EPS growth is expected to be 300% for the quarter ended March 31, 2021 and 161.5% in 2021.
It is no surprise that LVS has a “Buy” in our POWR Ratings systems with a grade of “B” in Trade Grade. In the 33-stock Entertainment – Casinos/Gambling industry, LVS is ranked #9.
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SBUX shares were trading at $104.85 per share on Monday afternoon, down $0.82 (-0.78%). Year-to-date, SBUX has declined -1.99%, versus a 1.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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