Market futures were relatively higher to start off Thursday, but that is not to say this week has been without its ups and downs. Considering the recent stress markets have been under from current headwinds, one Wall Street analyst has some ideas involving the gig economy that could prove fruitful going forward.
Inflation is still running rampant at levels not seen in over 40 years. At the same time, the labor market has been fairly resilient, with some of the lowest unemployment levels we have seen in a while. Even jobless claims have reached their lowest levels in the past 52 years (notwithstanding the current print coming Thursday morning).
The strength in the labor market is a good sign of recovery, but like most things, there must be a balance. So as unemployment continues lower, it is basically signaling that demand for jobs is increasing. Some economists speculate that this increase in demand is such that consumers can make more money to afford these historic levels of inflation. Economically speaking, once this reaches dire levels of demand, we could be in for some more trouble.
This is why the gig economy is so important. It offers consumers a way to make cash on the side in a flexible manner. The gig economy could very well be dealing with a surplus of labor going into the summer, which could play out well for the following five stocks. Even while the bears are still suggesting markets at large could go lower, Bernstein believes that these gig economy stocks can stand up to a potential recession, even a couple with over 50% upside.
Lyft Inc. (NASDAQ: LYFT) operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. Lyft has been playing second fiddle to Uber for a while now in terms of market cap and footprint, but it offers a pure-play investment for ridesharing whereas Uber is diversified across foreign markets and even into food delivery. Bernstein started Lyft with a Market Perform rating and a $22 price target, which implies upside of 32% from the most recent closing price of $16.72.
Lyft stock was last seen trading around $17, in a 52-week range of $16.33 to $63.07. The consensus price target is $43.61.
Bernstein initiated coverage of Etsy Inc. (NASDAQ: ETSY) stock with an Outperform rating and a $105 price target, implying upside of 50% from the most recent close at $70.21. Etsy operates an online marketplace that connects buyers with sellers for custom-made artisanal goods. Some might even call this platform a “hipster eBay.” Etsy operates within the United States, United Kingdom, Germany, Canada, Australia, France and India.
Etsy stock was last seen trading around $73, in a 52-week range of $68.40 to $307.75. The consensus price target is $152.11.
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