Let’s take a look at three stocks that should fare especially well in the “new normal”: The Walt Disney Company (DIS), Uber Technologies (UBER), and Lyft (LYFT).
The Walt Disney Company (DIS)
Invest in DIS and you will be investing in everything from the company’s theme parks to Star Wars, ESPN, ABC, Marvel, and the popular Disney Plus video streaming service. DIS theme parks will undoubtedly receive an influx of customers in the immediate aftermath of the pandemic. Household savings rates have skyrocketed during the pandemic, meaning there will be plenty of free-spending families ready to pay for DIS theme park tickets and more DIS offerings when society reopens.
Check out the DIS POWR Ratings and you will find the stock has “A” grades in the Industry Rank, Trade Grade, Peer Grade, and Buy & Hold Grade components. DIS is ranked first of 15 publicly traded companies in the Entertainment – Sports & Theme Parks category.
Of the 18 analysts to have studied DIS in-depth, 14 insist it is a “Buy”, four-view it as a “Hold” and none advise selling. DIS has steadily climbed all the way back to its pre-pandemic price range of $145 to $150. In fact, the stock recently topped the $150 mark in anticipation of a return to normalcy.
Uber Technologies (UBER)
Ridesharing services such as UBER have suffered a dramatic drop in business during the pandemic. People are staying at home, trading stocks, playing video games, watching TV, and saving money rather than heading out for a night on the town.
However, UBER is poised to rise once society reopens. Even if the pandemic rages on in certain countries, UBER operations will continue in others. UBER currently operates in the United States, Asia, the Middle East, Europe, and Latin America. The POWR Ratings show UBER has “A” grades in the Peer Grade, Trade Grade, and Buy & Hold Grade components.
Of the 21 analysts who have studied UBER, 19 insist it is a “Buy” while two advise holding and zero recommend selling. Now that UBER has sold its self-driving ATG technology to Aurora, the company can squarely focus on serving its customers rather than attempting to advance autonomous driving tech. This narrowed focus should bode well for UBER as a company as well as its shareholders.
As long as the vaccine proves effective, UBER should continue to ascend in the months ahead.
Lyft (LYFT)
LYFT is in a similar position to UBER yet it has not given up on its autonomous driving technology. The POWR Ratings show LYFT has an “A” grade in the Trade Grade component along with a “B” grade in the Buy & Hold Grade component. Of the couple dozen analysts who have studied LYFT, 19 consider it as a “Buy” and five recommend holding.
LYFT dropped down to $15 when the pandemic first began, jumped up to $40, dipped right back down to $23, and has since taken off, ascending all the way to $47. In other words, the stock should move right back to its pre-pandemic trading price of $55 in the months ahead, assuming the vaccine proves effective and is distributed to the masses without significant impediment.
LYFT has used the pandemic as an opportunity to remove $300 million worth of fixed and variable costs. If all goes as planned, LYFT will hit adjusted EBITDA profitability by the end of next year. This is quite the accomplishment, considering the setbacks caused by the pandemic.
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UBER shares were trading at $53.24 per share on Wednesday morning, up $0.23 (+0.43%). Year-to-date, UBER has gained 79.02%, versus a 16.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
More Resources for the Stocks in this Article
Ticker | POWR Rating | Industry Rank | Rank in Industry |
UBER | Get Rating | Get Rating | Get Rating |
LYFT | Get Rating | Get Rating | Get Rating |
DIS | Get Rating | Get Rating | Get Rating |