Best Research Ideas
U.S. Insights – No Longer Window-Shopping: Stocks Best Positioned for a Surge in Consumption
Jefferies believes that a surge in personal income coincident with a reopening U.S. economy will unleash substantial pent-up demand in service sector consumption. Chief Economist Aneta Markowska forecasts 2Q GDP growth north of 8%, supported by the next round of stimulus, more vaccines, better weather and pent-up demand, which should combine to benefit the Service Sector considerably. On consumption specifically, she forecasts ‘21 and ‘22 growth of 7% and 4.1%, respectively, in the Personal Consumption Expenditures price index, or PCE. Within this context, Jefferies’ Research highlights the potential for the best consumer stock backdrop in decades, and points out that in prior PCE growth cycles, consumer sector sales growth rose significantly. Analysts flagged 27 stocks with the most exposure to this dynamic. The list includes: ABNB, BLMN, CZR, EAT, LUV, LYFT, PLNT, SIX, TAP and TJX.
— Jefferies Equity Research