- As the coronavirus pandemic wears on, “staycations” should support stocks tied to solitary leisure, Bank of America analysts led by Robert Ohmes wrote Monday.
- Credit card data suggests that spending solitary activities such as golf accelerated in June.
- In addition, travel and Google Mobility data show that consumers are staying closer to home and increasing visits to parks and beaches over restaurants and malls.
- Here are three stocks that Bank of America upgraded as they’re poised to gain from the “staycation” trend.
- Read more on Business Insider.
Even as the US economy reopens, many Americans are still practicing social distancing rules that are even impacting how they vacation, according to Bank of America.
“We believe COVID-19 is accelerating the consumer spending shift away from traditional entertainment (e.g. amusement parks, movie theaters, & tourist attractions) and international travel to ‘solitary’ leisure activities (e.g. golf, marine, hiking, camping) and ‘staycations’,” a group of analysts led by Robert Ohmes wrote in a Monday note.
There are a few data points that back up the claim, according to the note. First, travelers are holding back and choosing to stay local as the coronavirus still presents a health threat, Bank of America said.
Google mobility data through mid-June suggests that visits to parks, beaches, and marinas are growing, and tracking nearly 70% above pre-COVID levels. At the same time, visits to restaurants, shopping centers, theme parks, museums, libraries, and movie theaters are 16% below pre-COVID levels.
Credit and debit card data also suggests that consumers are spending more money on solitary leisure activities, according to the report. Through mid-June, spending on entertainment such as movie theaters and amusement parks is down nearly 90% from a year ago, while spending on activities such as golf and marine activities are up double-digits on the year and continuing to gain.
This trend will support three stocks that "should benefit from a potential sustained change in consumer habits due to rising consumer demand for active social distancing & contactless leisure experiences," according to Bank of America.
In addition, the "solitary leisure" stocks will especially gain with fears of a potential second wave of coronavirus cases mounting, Ohmes wrote.
These are the three "solitary leisure" stocks Bank of America recommends.
1. Dicks Sporting goods
Ticker: DKS
Price target: $50 (from $45)
Rating: Buy
"We believe DKS is the best positioned retailer to benefit from the increasing popularity of golf as one of the largest equipment retailers in the U.S.," Ohmes wrote.
Source: Bank of America
2. Columbia Sportswear
Ticker: COLM
Price target: $90 (from $82)
Rating: Buy
"COLM should see momentum from more participation in Camping, Hiking, and Fishing as visits to national parks continue to increase," Ohmes wrote Wednesday.
"Columbia Sportswear apparel, including its PFG line, should be a beneficiary," he said, adding, Columbia Brand Footwear "should see momentum especially in hiking & trail running categories."
Source: Bank of America
3. Yeti
Ticker: YETI
Price target: $42 (from $35)
Rating: Buy
"We also see YETI as a key beneficiary of the shift towards solitary leisure activities as its coolers & drinkware are used across marine, fishing, park, and beach activities," wrote Bank of America analysts led by Ohmes.
Source: Bank of America