It is hard to believe that it has been a full year since the massive shutdown of the country due to the COVID-19 pandemic. What a difference a year makes, with three vaccines being distributed and administered, new cases and deaths dropping rapidly and a massive round of stimulus money already hitting some bank accounts. The hope of many is that we are heading toward full herd immunity and a return to life as we knew it entirely by the fall.
The equity strategy team at Jefferies is very positive on the economy for this year, as demand is expected to surge, and they see gross domestic product for 2021 coming in at the highest levels in years. They noted this when discussing the very positive outlook going forward:
We believe that a surge in personal income, coincident with a reopening economy will unleash substantial pent-up demand in service sector consumption. Chief Economist Aneta Markowska forecasts GDP growth of 6.9% in 2021, with much of that first-half-loaded and service-oriented. Specifically, she sees second quarter GDP 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.
Jefferies is focused on 27 companies the firm feels will see a huge benefit from the pent-up demand. We screened the list for companies rated Buy at the firm that make sense for growth investors looking to play the resurgence. These five look especially good now. It is still important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Increasingly, travelers domestically and overseas have turned to this company to find comfortable lodging at all price points. Airbnb Inc. (NASDAQ: ABNB) operates a platform for stays and experiences to guests worldwide. The company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences. It primarily offers private rooms and luxury villas. Formerly known as Air Bed & Breakfast, the company changed its name in November 2010.
The stock was a parabolic winner out of the gate last month, and while it backed off some, it still offers investors an opportunity to scale in funds and start acquiring shares to build a position. Jefferies is very positive and noted in the research report it expects Airbnb bookings and revenue to return to pre-pandemic levels by the first half of 2022, showcasing the resilience of the home-sharing market.
Jefferies has set a $210 price target for the shares and an upside target of $250. That compares with a lower $185.84 Wall Street consensus. Airbnb stock closed on Monday at $209.99 a share.