Major stock markets may have suffered Thursday following a spike in COVID-19 cases in the US and the Fed’s monetary policy decision, but some large cap stocks are still faring quite well.
The Dow Jones Industrial Index dropped more than 6%, while the S&P 500 dipped by 3%. Investor fears mounted about a second wave of coronavirus infections and a bleak economic forecast from the US Federal Reserve.
Luckily, market experts don’t see the downturn lasting. In fact, some believe a slight retraction is necessary. One thing is for sure, there are still some very promising large cap stocks that are worth taking a closer look at this summer.
3 Large Cap Stocks to Watch: The Walt Disney Company (NYSE:DIS)
Although the Walt Disney Company fell off a cliff in March when all its operating businesses got hit hard by COVID-19, the stock has since made a serious rebound.
For nearly two months, Disney’s theme parks were closed, movie theaters were closed, TV ad spending slowed, cruise ships stayed docked, and consumers stopped buying games and toys, causing DIS stock to drop to a low of $79.07.
Although Disney’s share price was down 7.81% by end of day Thursday at $112.64, it is still up over 42% from March lows. Now that movie theaters are expected to reopen across the US in July, DIS stock could rebound to previous highs of $140 or $150 in the coming months.
Disney is also planning to reopen its parks in July, which will definitely help its bottom line.
Despite amusement park and retail store shutdowns, the Walt Disney Company reported a 21% revenue increase in Q1 2020 to $18 million compared to $14.9 million in Q1 2019. Media networks and direct-to-consumer international revenue were the main reason the company saw an uptick in its revenue, but it remains to be seen how the closures will affect the company’s Q2 2020 earnings.
Wall Street analysts have offered DIS mixed reviews, with 12-month price targets ranging from $105 to $140 for an average of $124.52, which suggests a potential upside of around 10% from its current price.
3 Large Cap Stocks to Watch: Nike Inc. (NYSE:NKE)
Another large cap stock that saw a severe drop in March, but has since rebounded, is Nike Inc. The stock experienced a low of $60 at the end of March as retail stores shuttered their doors.
The stock has since gone back up to $95.17, but it could go higher still now that retail stores are opening back up, and consumers are looking to get out and spend.
>> Best Blue Chip Dividend Stocks for June 2020
Like Disney, Wall Street analysts have mixed reviews about NKE stock, but many are pointing to a “buy” recommendation. Earlier this month, Cowen boosted its 12-month price target for Disney to $110 from $85 and offered the company a “market outperform” rating.
Investors who are interested in Nike stock should keep an eye out for the company’s upcoming fourth-quarter fiscal 2020 financial results on Thursday, June 25, 2020. According to Zacks, NKE shows potential for another earnings beat.
In the most recent quarter, NKE was expected to post earnings of $0.54 per share, but instead reported $0.78 per share, which represents a 44.44% surprise. For the previous quarter, the consensus estimate was $0.58 per share, while it actually produced $0.70 per share, a surprise of 20.69%.
3 Large Cap Stocks to Watch: Amazon.com Inc (NASDAQ:AMZN)
Last but not least on the list of winning large cap stocks to buy this summer is Amazon.com Inc; however, investors may have missed the boat on this one already.
AMZN stock experienced a slight dip in March like the others, as investors feared that consumer spending would come to a screeching halt. However, sentiments quickly changed when consumers were forced to turn to online shopping amid shop closures.
Since its low of $1,626.04 in March, Amazon stock has rebounded by over 57% to $2,557.96.
Unfortunately, the company is facing a formal antitrust complaint from the European Union, which is an important step in a long-running investigation that could lead to massive fines and/or changes to Amazon’s business model.
The complaint is being filed amid concerns that the US e-commerce giant could be shortchanging smaller merchants who sell on its online marketplace.
Although it remains to be seen what this antitrust complaint will mean for the company, it could cause the stock to dip once again and could mean it would be best to avoid AMZN for the time being.
Takeaway
The last few months have been trying for stock markets, but things may be looking up now that economies are beginning to reopen.
New COVID-19 cases could put a damper on things in the short-term, but it’s unlikely President Trump will be deterred from his plan to get the country up and running as soon as possible.
In the meantime, there are still plenty of promising opportunities to get in on winning large cap stocks this summer.
Are there any companies on your radar? Tell us about them in the comments!
Featured Image: DepositPhotos © eric1513
