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Pro Analysis

Here are the stocks UBS believes will benefit most from tax reform

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Patrick T. Fallon | Bloomberg | Getty Images

Investors could see even more gains in 2018 thanks to underappreciated effects of tax reform, according to UBS analysts.

"We believe changes to personal taxes will drive an increase in consumption, benefiting a variety of spending categories and demographic segments in the coming quarters," Michael Lasser, analyst at UBS, wrote to clients Thursday. "We see the largest consumption category growth in other lodging, entertainment fees and admissions, public and other transportation, owned dwellings, and alcoholic beverages."

Lasser said most U.S. households will see an increase in disposable income of 2 percent to 4 percent within the year, adding up to at least $200 billion in additional cash for the nation's consumers.

The analyst highlighted several stocks that tend to climb when consumer spending rises, complete with UBS's thesis on each company and corresponding price targets.

Here are five buy-rated stocks highlighted by the UBS analysts in light of Republican tax cuts.