Amidst the stock market disruption due to coronavirus pandemic, the paradigm of the financial market is shifting towards a new direction. Despite slow consumerism over the past few weeks, the optimism to resume the economic structure continues to lift the spirits of companies.
Apart from the plunge of numerous stocks, the market saw the rise of several renowned and unexpected stocks to skyrocket. Most of the companies that saw the growth have long-term potential with low-debt.
Amazon had great revenue growth from the first quarter (Q1). Despite thin margins of different products, the ad revenues and subscriptions grew substantially. However, the AWS cloud service continues to see a margin decline. That said, the second quarter of the stocks missed out on $4 billion due to the COVID-19. As the valuation of the stock multiplies, buyers should hold it at $2,367.96 PT.
Comparatively, the second quarter (Q2) of Disney’s stocks weakened with 63% EPS. The new normal and state of uncertainty will continue to befuddle Disney throughout the pandemic. In fact, numbers indicate that the operating profit of Disney’s theme parks plunged to 58%. Although the Shanghai Disney park is now open, the possibility to reopen the American Disney theme park remains slim.
In addition, Disney’s Studio entertainment stocks dropped by 8% after the closure of movie theatres and production departments. However, Disney’s latest streaming service, Disney+, has acquired 54.5 subscribers. Market analysts, however, estimate that Disney’s second-quarter will probably witness the worst numbers during the pandemic crisis. It holds at $145 PT.
You can expect modest sales growth by the end of the second quarter of 2020. However, once the growth annualizes, stocks may see periodic sustainability of an average growth rate. Consequently, there’s a good chance of continuous cash returns for shareholders via share dividends and repurchases. Strategically, the fact remains that the Mylan deal will render near-term valuation. Currently, it has a hold rating of $39 PT.
The revenue growth of Tesla grew by 32% ($5.99 bn), which is higher than analysts expected. Although the 500,000 deliveries of vehicles no longer exist, Tesla still claims that it can build up to 500,000 vehicles in 2020 despite various production disruptions. The success of the next quarter for Tesla largely depends on the success of Model 3 production in China. Simultaneously, the newly introduced Model Y should be able to improve profit margins for the company. It holds at $650 PT.
The second quarter (Q2) growth of the Siemens was unprecedented and better than consensus. However, the company starts to follow the timeframe for the energy business spin-off. Sources suggest it may have more diversified plans ready at the end of the second quarter in 2020. As the progression of transformation continues to shape the company, it now holds the buying rating of EUR 134 PT.
Bristol Myers Stock
BMY (Bristol-Myers) is one of the most reputable pharma companies on a global scale. It’s robust pipeline drugs’ portfolio will be sufficient to get through the company during these dire times. However, Bristol-Myers intends to capitalize on more than just pipeline drugs in 2020. Therefore, expect a diversified portfolio in defensive holdings with new product launches that will ensure sustained growth — it maintains the buying position at $75 PT.
Activision Blizzard Stock
Just like the stellar first quarter (Q1), Activision can expect another profitable second quarter (Q2). The momentum of the franchise products such as Call of Duty and additional releases for the rest of 2020 will break new sales records. The social distancing measures and indoor initiatives worldwide will help the company reap the fruits of increased activity
As of now, EPS adjusted for the second quarter (Q2) is around 70%, which is significantly higher than expectations. Furthermore, the operational revenue of the Activision outperforms its previous profit margins by 30%. It has a positive 15% share market price performance with a hold of $90 PT.
It’s About Extended Longevity
Extended longevity refers to a powerful demographic shift that can shape the future of the stock market. However, its economic and societal implications can be hard to predict. The population of boomers will grow to 1.6 billion by the end of 2050. Naturally, different sectors want to make the most out of this consumer pattern’s spending power.
It is an age group that tends to be stick and requires better medical care. Therefore, long-term medical needs will be on the horizon in the coming years that would adopt a more favorable position when it comes to healthcare. You can expect various health and pharma companies to invest in cancer, diabetes, arthritis, and cardiovascular diseases.
Summary: What Lies in the Future?
As tumultuous as the financial downturn may be, the stock market future is not as pessimistic as the paranoia suggests. Sure, the lockdown and social distancing measures hit a significant number of businesses. However, there will be a surge in demand for treasured stocks during and after the coronavirus crisis. In essence, the global economic transformation has become the need of the hour. The quicker economies adapt, the sooner capitalism will revert to normalization.