These 15 stocks are poised to gain in a market reeling from coronavirus, UBS says

  • Even though markets have been rocked with volatility as investors panic that a coronavirus outbreak could hurt global growth, there are some stocks poised to gain, according to UBS.
  • UBS isn’t predicting the duration of the market choppiness or the depth of economic impact, it said in a Thursday note.
  • Here are 15 stocks that UBS says have attractive risk-reward going forward.
  • Read more on Business Insider.

Even amid market volatility and a sharp sell-off due to panic that the coronavirus outbreak will halt global growth, there are some stocks that are well positioned to gain in the next year, according to UBS.

By working with more than 40 analysts, and using UBS predictions, US equity product managers Joseph Parkhill and Peter Lennox-King put together a list of 15 stocks that trade close to “robust downside cases, thereby offering an attractive risk-reward profile for the next 12 to 18 months,” according to a Thursday note.

UBS is not predicting the length of the current market shock, or the depth of the economic impact of the “current unfortunate coronavirus outbreak,” according to the note. Still, the list of stocks represents a mix of sectors from the telecommunication, financial, healthcare, consumer, and energy sectors that have an analyst upside-to-downside skew of six-to-one.

The coronavirus outbreak that originated in Wuhan, China, has now infected 97,000 people and killed more than 3,300. While the majority of illness and death is in China, the virus has spread to at least 81 other countries. Stocks slipped Thursday amid investor panic that’s also pushed bond yields to record lows as traders pile into the safe-haven assets.

Here are the 15 buy-rated stocks, ranked in order of biggest percent gain to UBS’s base case.


1. New Relic

source
Stephen Yeargen via Flickr

Ticker: NEWR

Sector: TMT

% gain, upside: 125%

% gain, base case: 82%

% loss, downside: -9%

Upside/ downside skew: 14 to 1

Source: UBS


2. JetBlue

Ticker: JBLU

Sector: Airlines

% gain, upside: 100%

% gain, base case: 67%

% loss, downside: -13%

Upside/ downside skew: 8 to 1

Source: UBS


3. Stanley Black & Decker

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BOSTON, MA – JULY 24: Susannh Hanelin, a product manager at Stanley Black & Decker, demonstrates their current project, a door opener, at their grand opening at the new Boston Innovation Center in the Seaport District of Boston on Jul. 24, 2017.
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Getty Images

Ticker: SWK

Sector: Manufacturing

% gain, upside: 80%

% gain, base case: 49%

% loss, downside: -14%

Upside/ downside skew: 6 to 1

Source: UBS


4. The Hartford Financial Services Group

Ticker: HIG

Sector: Finance

% gain, upside: 61%

% gain, base case: 42%

% loss, downside: -7%

Upside/ downside skew: 9 to 1

Source: UBS


5. Athene Holding

Ticker: ATH

Sector: Finance

% gain, upside: 85%

% gain, base case: 41%

% loss, downside: -11%

Upside/ downside skew: 8 to 1

Source: UBS


6. Huntington Ingalls Industries

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The aircraft carrier Gerald R. Ford (CVN 78) under construction at Huntington Ingalls Industries-Newport News Shipbuilding
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Wikimedia Commons

Ticker: HII

Sector: Industrials

% gain, upside: 59%

% gain, base case: 39%

% loss, downside: -16%

Upside/ downside skew: 4 to 1

Source: UBS


7. PPG Industries

source
The Home Depot

Ticker: PPG

Sector: Materials

% gain, upside: 48%

% gain, base case: 39%

% loss, downside: -9%

Upside/ downside skew: 5 to 1

Source: UBS


8. Knight-Swift

source
Rebecca Cook/Reuters

Ticker: KNX

Sector: Transportation

% gain, upside: 60%

% gain, base case: 38%

% loss, downside: -12%

Upside/ downside skew: 5 to 1

Source: UBS


9. Kinder Morgan Inc.

source
cbonney via flickr commons

Ticker: KMI

Sector: Energy

% gain, upside: 43%

% gain, base case: 28%

% loss, downside: -11%

Upside/ downside skew: 5 to 1

Source: UBS


10. Palo Alto Networks

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Palo Alto Networks

Ticker: PANW

Sector: Technology

% gain, upside: 55%

% gain, base case: 28%

% loss, downside: -7%

Upside/ downside skew: 8 to 1

Source: UBS


11. AutoZone

Ticker: AZO

Sector: Retail – Discretionary

% gain, upside: 41%

% gain, base case: 24%

% loss, downside: -10%

Upside/ downside skew: 4 to 1

Source: UBS


12. Global Payments Inc.

caption
The US was still using magnetic stripe cards until 2015
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Sitthiphong Thadakun / EyeEm / Getty Images

Ticker: GPN

Sector: Finance

% gain, upside: 29%

% gain, base case: 24%

% loss, downside: -13%

Upside/ downside skew: 2.2 to 1

Source: UBS


13. Merck & Co.

Ticker: MRK

Sector: Biotech and pharma

% gain, upside: 48%

% gain, base case: 21%

% loss, downside: -9%

Upside/ downside skew: 5 to 1

Source: UBS


14. Johnson & Johnson

source
Getty Images

Ticker: JNJ

Sector: Healthcare

% gain, upside: 31%

% gain, base case: 20%

% loss, downside: -8%

Upside/ downside skew: 4 to 1

Source: UBS


15. Charter Communications

source
Getty / Bryan Bedder / Stringer

Ticker: CHTR

Sector: TMT

% gain, upside: 31%

% gain, base case: 20%

% loss, downside: -13%

Upside/ downside skew: 2.4 to 1

Source: UBS