"We expect the emergency use authorization and distribution of an effective vaccine during the next several months will lead to significant upward earnings revisions for virus-exposed firms and help give investors confidence to rotate into those low-valuation stocks," he wrote in a note to clients.
Based on earnings, the recovery, and record-low interest rates, Kostin says the S&P 500 should rally to 4,300 by the of 2021 and 4,600 at the end of 2022. And in that environment, less-expensive stocks are a more appealing opportunity. That said, Kostin isn't telling investors to give up on growth altogether, as low rates and sluggish economic growth will provide a baseline of support to those stocks. He also says the increasing interest in socially-responsible investing means companies with high scores on environmental, societal, and governance metrics will also fare well.
The following 20 stocks are arranged from lowest to highest based on how their estimated 2021 profits compare to the earnings the companies reported in 2019 earnings. For all of these companies, the Wall Street consensus is that they will earn less than half as much next year as they did pre-COVID.
What economic recovery? The Dems are getting ready to lock everything down again.
thanks
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