Why toys, cannabis and fast food could win stock themes in 2021, these analysts say

The S&P 500 SPX,
May be poised to break with a string of losses on Tuesday as stock futures soar on hopes surrounding Washington’s latest stimulus.

That’s after rising COVID-19 cases and lockdown concerns caused choppy action on Monday.

Indeed, more volatility appears to be the theme for 2021 as investors wait to see how those vaccines will roll out.

However, research and trade group MKM Partners, in its outlook for the year ahead, is positive: “We expect strong, above-trend growth for 2021 as vaccines and better therapies reopen efforts across the country.”

For our call of the daywe’re focusing on a handful of stocks that MKM considers decent bets for 2021.

That includes a well-known social media giant. “We believe that Facebook’s FB,
+ 0.23%
innovation pipeline in adjacent and incremental revenue opportunities such as commerce, payments, virtual reality and cryptocurrency will enable it to have sustainable growth (> 20%) in the near future, ”said Rohit Kulkarni, analyst at MKM.

His 12-month price target for Facebook is $ 330, up 20% from Monday’s closing price of $ 274. Risks to investors include increased regulatory pressure and declining engagement.

Read: US regulators are ordering Facebook and other social media companies to disclose how they collect information

Toy maker Hasbro HAS,
+ 1.25%
also gets the nod, as analyst Eric Handler sees the industry entering 2021 with low inventory, so little oversupply. And the rollout of COVID-19 vaccines should spur more Hollywood movies, allowing Hasbro to sell related merchandise.

“The combination of having full toy production capabilities coupled with catalysts associated with feature film releases, eOne [Entertainment One, which Hasbro acquired in 2019] Synergies and video game development should deliver record results in both sales and earnings per share by 2021 [earnings per share], ”Said Handler.

His 12-month price target of $ 104 a share implies a 15% rise from Monday’s close at $ 90.11. The speed at which entertainment returns to normal is a risk to Hasbro.

Another choice is fast food giant McDonald’s MCD,
+ 2.00%.
“We expect the current recovery and growth to come from menu, operations, convenience and digital initiatives, following the recent years of revolutionary changes, through asset upgrades, technology launches and delivery initiatives,” said analyst Brett Levy.

Levy’s 12-month price target of $ 255 implies a 20% gain from Monday’s close of $ 211.

MKM is also optimistic about oil and natural gas company Diamondback Energy FANG,
Analyst John Gerdes finds, among other things, a “superior” operating cash margin and lower costs, and his 12-month price target of $ 66 implies a profit of about 43% from Monday’s close of $ 46.

A final choice is Curaleaf CURA,
which fits with MKM’s preference in the cannabis arena for multi-state operators. Analyst Bill Kirk has a price target of CA $ 18 for one year on Curaleaf, implying a profit of about 24% from Monday’s end of $ 14. Big growing companies in New Jersey and New York are among the pluses, he says.

The markets

Equity Futures YM00,
+ 0.57%

+ 0.68%

+ 0.67%
rise, in addition to European stocks SXXP,
+ 0.06%,
and Asia had a predominantly negative session. Oil prices CL.1,
+ 0.79%
are softer after reaching a nine-month high on Monday. The International Energy Agency says oil demand will not fully return in 2021.

The buzz

An overview of the manufacturers in New York is on the doorstep, along with import prices and industrial production. The two-day meeting of the Federal Reserve starts on Tuesday (see preview). In China, a new set of official data shows that the economy is moving.

US lawmakers unveiled a $ 908 billion two-part bipartisan coronavirus aid bill late on Monday as the clock ticks towards the vacation break for Capitol Hill.

Apple AAPL,
is reportedly planning to increase iPhone production by nearly 30% in the first half of 2021 to keep up with demand for its new 5G handsets.

Preholiday COVID-19 lockdowns continue to spread across Europe. London is taking tougher measures starting Wednesday, as is much of South East England, which has been hit by a rapidly spreading new strain of the virus. That’s like New York inches closer to its own lockdown.

Joe Biden has been officially named president-elect by the Electoral College.

The graph

Random reads

In a pandemic year, the Christmas tree trade is thriving.

Perhaps 2020 was not the year the Vatican shook up its nativity scene.

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