Morgan Stanley vurderer de sektorer, der kan få gavn af opsvinget, og de sektorer, som måske er blevet overvurderet under coronakrisen. Det afgørende er, at investorerne skal være mere selektive end før. Det er f.eks. uvist, hvordan forbrugerne vil reagere efter et års lockdown – vil de rejse mere eller bruge pengene på hjemmefronten? Nogle sektorer har haft gavn af work-at-home og stay-at-home det seneste år, men nogle kan få tilbageslag. Omvendt vil digitaliseringen og online-handel fortsætte med sin stærke fremgang. Spørgsmålet er blot, om det allerede er indregnet i kurserne. Morgan Stanley venter generelt stigende aktiekurser, men de kan svinge mere end normalt gennem 2021.
Markets Ahead of Reopening: What’s Mispriced?
Ahead of a possible re-opening, which companies might retain gains seen in the pandemic, which will revert to pre-COVID norms and which are mispriced?
Ellen Zentner: Welcome to Thoughts on the Market. I’m Ellen Zentner, Chief U.S. Economist for Morgan Stanley Research.
Adam Virgadamo: And I’m Adam Virgadamo, U.S. Equity and Thematic Strategist. And on this episode of the podcast, we’ll be talking about the path ahead for the U.S. economy post COVID, as well as some areas where markets might be mispricing the re-open.
Ellen Zentner: So, Adam, you know, you’ve been saying that markets have painted the post COVID recovery with a fairly broad brush and that the recovery is largely priced in to the major indices. You know, how should investors approach equities now?
Adam Virgadamo: In a word, Ellen? Selectively. I think equity indices have broadly priced in a lot of the upside at the index level, earnings expectations now sit well above prior highs. At the same time, we expect the interest rates to move higher, which should compress the multiple a little bit. So over the course of the year, what we’re expecting is a bit of a tug of war, a tug of war between earnings expectations that continue to move higher, albeit at a slower pace with the reopening underway, and a multiple that compresses a little bit. On net we still see marginal upside to equity indices over the course of the year, but we think that’s likely to be in a tug of war type fashion or with some back and forth over the course of the year.
Ellen Zentner: So with the need to be more selective, that might be a good place to start by discussing some of your recent work on how you do put that into practice. Why don’t you walk us through what you’re suggesting?
Adam Virgadamo: So we recently dug into this, writing our latest in our Life After Covid report series. And we wrote this report because, as I said, the index upside looks more muted at exactly the same time the reopening is occurring. What that means is that over the next few months, we’re going to start to get data on what spending patterns look like, on what consumption patterns are going to look like on a going forward basis. So the key debate for us is to think about retention, reversion, and what’s in the price. When I say retention, what I mean is retention of COVID economy gains. And of course, by reversion I mean wallet share shifts back towards prior patterns of consumption. Think of travel as an obvious example here. For investors, it matters where those wallet share shifts are priced appropriately and where they are not. What we tried to do in our note was introduce a systematic framework to look at how the market may be extrapolating COVID economy gains or COVID economy challenges, and then overlay that with our analyst views to look for stocks and sectors where the market may be a bit too optimistic or too pessimistic.
Ellen Zentner: OK, so you mentioned one sector, travel, but just more broadly, are there pockets where the market has been overly optimistic on the recovery? And if so, could you give us a couple of examples of what you found?
Adam Virgadamo: So the work showed that pockets of the market like semiconductors, home entertainment, Internet services, parts of the communication software complex, and really anything tied to nesting or at-home consumption, all have the highest expectations for durable COVID economy benefits. The tension with some of those sectors, though, is that they’re also driven by a powerful cyclical upswing, we expect. So the message there is just be more selective. Make sure that the cyclical tailwinds are going to be enough to deliver on those high expectations within the groups. In many cases they will be. In some they won’t. So it goes back to the selectivity argument.
Ellen Zentner: So, Adam, on the flip side of that, can you give us a couple of examples from a sector point of view where you think the market has been overly pessimistic on the recovery?
Adam Virgadamo: Absolutely. So leaning into our analyst’s views and what we felt the market was pricing from a systematic perspective, we highlighted a few sectors where there could be some stock selection opportunities. Banks and consumer finance, personnel services, pockets of the energy complex, advertising, particularly outdoor advertising, off price retailers, food distribution and enterprise technology all look to us to be among the more target rich environment for potential upside surprises.
Ellen Zentner: And what about areas where companies could retain the gains they’ve seen in the pandemic?
Adam Virgadamo: So we had a lot of positive stock views tied to e-commerce and that you got more customers buying online. There was increased digitization of consumer wallets, increased digitization of buying patterns. And while we certainly expect stores to reopen and consumers to return, longer term we do think that accelerated the adoption curve for e-commerce. Other areas we see increased benefits or places with a focus on data or digital customer engagement. And in a few places, maybe some areas where you have cyclical upside driven by the amount of fiscal stimulus we expect to power the economy that could power the sector’s earnings path on a forward look.
