Democratic sweeps of the White House and Congress on Tuesday will be good news for cannabis growers, casinos, fast food chain operators and online retailers.
Energy drink makers, on the other hand, do well no matter who wins the election, according to an analysis of election results by Stifel analysts.
Example,
Monster Drink
(ticker: MNST) is a winner in the so-called blue wave because expected infrastructure spending that improves roads will encourage driving, and driving increases convenience store sales, according to Stifel’s Mark Astrachan. Infrastructure spending is also possible if Republicans retain their power in the White House and Senate.
Monster Energy raised $ 1.2 billion in convenience store sales last year, according to Statista. That category makes up half of Monster sales, noted Astrachan, and it’s not changing the way voters want it to.
“
We hope that the antitrust check on big technology will persist in all scenarios as the two candidates have criticized the power and market position of the big tech companies ”with different motivations.
“
– Stifel analysts Scott Devitt and John Egbert
The blue waves – a term that describes an overarching victory for Democrats – will likely generate the largest amount of stimulus money in the new year, around $ 2.5 trillion to $ 3 trillion, said Brian Gardner, Stifel’s Washington-based policy strategist, in a note Friday.
The Democratic sweep will also increase the likelihood of spending on infrastructure, higher taxes, a higher minimum wage, and laws on clean energy and immigration.
A win for Democrat Joe Biden with the Senate and House divided is likely to mean gridlock, meaning less stimulus and less likely to be a large-scale infrastructure bill, said Gardner.
If things stay the way they are – Republican Donald Trump wins a second term with a divided Congress – tax increases are invisible, trade tensions could increase, and antitrust scrutiny will overwhelm big tech and social media. Less money will be spent on stimulus, but some infrastructure spending is likely.
But any stimulus will benefit consumer products companies and retailers as
Target
(TGT),
Walmart
(WMT), and
Wholesale Costco
(COST).
The pot grower was most likely the winner under the blue wave because it showed momentum for a concerted federal effort to legalize marijuana. Sales of legal marijuana in the US have reached an estimated $ 15.5 billion this year, but access has been uneven.
Even if full federal approval fails,
Canopy Growth
(CGC) and
Cronos Group
(CRON) can find US expansion opportunities through
Constellation brand
(STZ), and
Altria
(MO), each of which has a sizeable stake.
In gambling, an industry familiar to Trump,
Las Vegas Sands
(LVS) and
Wynn Resorts
(WYNN) will benefit from Biden’s win, in large part because it will likely lead to easing tensions with China, where American casino operators hope to upgrade Macau properties, said Stifel’s Steven Wieczynski.
Trump’s win, on the other hand, could cause investor panic, analysts said. “Fear will be around licenses not being renewed or significant penalties being imposed.”
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Stimulus is also great for restaurant sales, which can get a boost in any scenario. The best position is a franchise chain that can offset the possibility of a higher minimum wage and higher taxes by increasing menu prices.
That’s great for Burger King, the brand run by
Restaurant brands
(QSR), and
Wendy
(WEN), and not so good for company property
Chipotle
(CMG), which was most affected by the higher minimum wage, said analyst Chris O’Cull.
In technology, antitrust surveillance will last regardless of who wins, with an emphasis on major mergers. The Trump administration has declared war on big technology, and a The Justice Department case against Google won’t leave next year, say analysts Scott Devitt and John Egbert.
“We expect the antitrust scrutiny of big technology to persist under all scenarios as both candidates have been critical of the strength and market position of the big tech firms” with different motivations, analysts said.
Trump’s reliable target
Amazon.com
(AMZN) will not be much affected if he stays in office, Stifel said, but the higher the stimulus the better for the e-commerce giant. “We hope Amazon will be the biggest beneficiary under the Blue Wave scenario.”
Write to Liz Moyer at [email protected]
