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What Stocks Are at Risk as Budget Cuts Loom?

JPMorgan says education services, electronic equipment and instruments, as well as aerospace and defense could be the hardest-hit sectors as the bipartisan congressional “supercommittee” looks for targets to cut the federal budget.

US Capitol Building with cash
US Capitol Building with cash

According to the report out Friday, if the Joint Select Committee on Deficit Reduction finds $1.5 trillion in savings over 10 years, companies making a big chunk of their revenue from government sales will suffer the most.

Based on the annual filings of S&P 500 companies, JPMorgan identified 16 industries and 31 companies with significant disclosed sales from the U.S. government totaling $280 billion annually.

Here’s the list of the top 10 sub-industries:

The report warns that the numbers are understated, as they do not reflect reimbursements from federal programs.

Here are the stocks to watch, in order of exposure to government sales:

Northrop Grumman, SAIC Inc., Raytheon, Lockheed Martin, L-3 Communications, Apollo Group, Humana, General Dynamics, Harris, DaVita, Coventry Health Care, FLIR Systems, ITT Corp., Computer Sciences Corp. , Boeing, Accenture, V.F. Corp., Jacobs Engineering, Goodrich, Aetna, Cisco Systems, Assurant, Express Scripts, Fluor Corp., Hess, Honeywell International, Windstream Corp., CA Inc., Ball Corp., General Electric, and Motorola Solutions.

Symbol
Price
 
Change
%Change
PRGTX
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AET
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NOIGX
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CRIGX
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XCS
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TGEAX
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CSC
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CSCO
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CVH
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DVA
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ESRX
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FLIR
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FLR
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O066
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ICTXX
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HON
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HRS
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HUM
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ITT
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JEC
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LLL
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LMT
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MSI
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NOC
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RTN
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LDOS
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VFC
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WIN
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The deadline for the supercommittee recommendations is Nov. 23.

Questions? Comments? Email us at marketinsider@cnbc.com and follow me on twitter @kfrayter

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

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