While the stock market rebounded well after the initial Covid-19 shock, certain industries and companies suffered. Most businesses that cannot operate remotely or provide unessential services struggled to earn revenues. As a result, their stock prices fell – and many have not recovered.
As more people get vaccinated against the virus, you can expect people to start using these industries and businesses, again. In fact, some companies might see terrific gains in stock value as pent-up customers eagerly rush to buy their services and products.
No one knows for sure how the stock market will respond to a reopened economy that doesn’t need to spend so much time, money, and effort protecting people from a deadly disease. However, some industries and stocks stand out as likely winners that will grow quickly as life returns to normal.
Airlines—Ryanair Already Doubled In Price
Ryanair’s stock value fell sharply after the Covid-19 virus ran rampant globally and governments initiated lockdowns to reduce its spread. At the very beginning of 2020, Ryanair stock sold for nearly $100 per share. By mid-May, it had fallen just below the $50 mark.
Luckily, Ryanair managed to recover over 2020 as some business and recreational travel resumed. Some investors also spotted the pandemic as a good time to buy Ryanair shares at low prices.
Certainly, the initial shock of Covid-19 sent investors running. As people regained their senses and realized that travel would become an essential service, again, in a post-pandemic world, investors started buying shares. A year after the COVID market selloff, RYAAY share price had doubled from its lows and then some.
Although Ryanair shares have regained their value, investors know that they still face many uncertainties. How long will it take for people to feel safe flying again? Will higher fuel prices influence whether people choose to fly instead of using other means of transportation?
Despite these unknown factors, it seems likely that the pent-up desire to travel will make flying extremely popular as Covid-19 infection rates decrease. People all over the world have been delaying their travel plans. When they have a chance to move freely and safely, companies like Ryanair should thrive.
Cruise Ship Stocks—Carnival
Like most public companies, Carnival’s share price plummeted in March 2020. At the beginning of January 2020, Carnival shares sold for about $50. By April, the shares’ value had fallen to below $8.50.
Carnival has recovered somewhat over the past year, but it has not returned to its previous high price levels. In April 2021, investors could buy Carnival (CCL) shares for less than $30 each.
Carnival’s inability to recover as easily as Ryanair is probably the result of what the companies provide. Even during a pandemic, some people will need to travel by plane. Following some precautions (wearing masks, distancing passengers, etc.) could even make air travel relatively safe.
Carnival, however, does not provide an important service. The cruise line exists for vacationers to enjoy themselves. That means mingling, participating in group activities, and enjoying buffets. The odds are that few people would feel safe on a cruise boat until after they and most of the population get vaccinated or hefty screening is put in place before the ship sets sail.
Assuming that enough people get vaccinated, you will probably see Carnival’s share value pop as people buy up every ticket available. After more than a year avoiding social situations, thousands and thousands of people want to relax on Carnival cruise ships.
The increased interest—and potentially higher ticket prices—should translate to higher CCL share prices post covid.
Real Estate—Simon Property Group
In the summer of 2016, a share of Simon Property Group was worth more than $200. At the beginning of April 2020, shares sold for about $47 each, a catastrophic decline of over 75%. The company has recovered much of its value over the last year, but it still struggles to stay above $110 per share.
Simon Property Group (SPG) was hit hard by the pandemic because it’s one of the biggest commercial real estate investors in the United States.
The pandemic made it extremely difficult for retail stores to generate revenues. Many people switched to e-commerce sites so they could avoid direct contact with store employees and other customers.
As businesses earned lower revenues, many of them could not afford to continue their leases.
Similarly, many businesses decided to close some of their offices to save money while they let employees work from home.
As a massive real estate owner, Simon Property Group got hit hard as the pandemic upended the retail sector and disrupted businesses.
This situation shouldn’t remain for long. Even though some employers will continue using remote workers, many companies can’t wait to get their people back into the office, where they can communicate and collaborate more effectively. Some are experiencing Zoom (ZM) fatigue and actually look forward to sitting in conference rooms.
As more companies and retail stores resume standard operations, Simon Property Group should attract more leasers and renters.
The company has already recovered somewhat. Completely reopening the economy should give Simon a chance to earn impressive profits in the remaining quarters of 2021.
Travel & Leisure—Disney
Disney (DIS) suffers from a similar problem as Carnival. Unlike Carnival, though, Disney has a growing entertainment platform that has helped the company earn money from popular movies, television shows, and merchandise even as the number of people going to its theme parks dwindled.
Between February and March of 2020, Disney stock shares fell from about $140 to about $86. Interestingly, the company’s value has grown significantly over the last year. In March, DIS stock price exceeded $200 per share.
Considering the current price, now might seem like a strange time to invest in Disney. Ideally, investors should have purchased stock when the share prices were below $100. Still, reopening several theme parks without Covid-19 restrictions will add a lot of money to Disney’s 2021 revenue. It could push the share values even higher.
And under the hood is the diamond in the rough: Disney+ is growing subscribers far faster than Netflix did in its early days. That could fundamentally re-price Disney higher from a multiple perspective. Streaming is the future and Disney+ may be the viable alternative to Netflix given its vast content library.
The share value of Kohls has never broken the $100 barrier. Still, the company’s shares have become increasingly more expensive since the mid-1990s, when you could invest for about $10 per share.
In November 2019, Kohls shares were worth about $60. It fell to $11.51 at the beginning of April 2020.
As of late April 2021, Kohls has recovered its pandemic losses. That’s a good sign for the company. There is a good chance, though, that it could grow beyond its typical price in late 2021 and early 2022 as more people feel comfortable shopping in person at department stores.
Top Stocks For Post Covid: Conclusion
Although no one can predict precisely what will happen to any company’s stocks, some businesses have a better position to grow in a post-Covid economy.
Ryanair, Carnival, Disney, Simon Property Group and Kohl’s stand out as some enticing options for investors to consider.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.