Goldman lists stocks for if the worst is over, and stocks for if it's not

Published Thu, Apr 9 20201:10 PM EDT

(This story is for CNBC Pro subscribers only.) The stock market rebounded sharply this week amid rising optimism that the coronavirus pandemic is improving. Still, many investors are skeptical the worst of the outbreak is behind us and the economic recovery would be an immediate upswing. Goldman Sachs is advising clients to focus on two buckets of stocks in the short term: one group poised to outperform even if the widespread shutdowns are extended and one group slated to recover quickly once the virus is contained. The bank looked across its coverage universe to find stocks with businesses that are fundamentally stable or are benefiting from the stay-at-home societal trend amid the coronavirus. Amazon is one of the names Goldman believes should hold up relatively well even if the government-mandated shutdown is prolonged. Shares of Amazon have outperformed the broad market significantly, rising nearly 10% this year, versus the S & P 500's 14% loss. "The scale and value of Amazon's lead in commerce is being demonstrated in real time in the current crisis," Goldman analyst Chris Hussey, said in a note. "Just as the financial crisis accelerated the shift of retail spending online, we see a step function increase in both e-commerce's share of retail and Amazon's share of e-commerce coming out of this crisis." Lockheed Martin should continue to benefit from the government's increased defense spending, the analyst said. Meanwhile, drug wholesaler McKesson has historically been resilient during periods of economic downturns, he added. "The drug wholesaler should be somewhat insulated from a significant impact to its numbers related to potential Coronavirus headwinds," Hussey said. Goldman also identified five stocks that should recover relatively quickly once the environment stabilizes. Caterpillar offers an attractive 4.3% dividend yield and should continue to benefit from "rising technology content in its equipment," the Goldman analyst said. Shares of the construction and mining machinery leader rebounded more than 20% in the past month, trimming its 2020 losses to about 14%. The restaurant industry has seen steep drops in sales amid the coronavirus shutdowns, but Goldman said Chipotle Mexican Grill should bounce back swiftly with its solid digital and delivery infrastructure. "As people eventually go back outside again, look for CMG with its strong footprint across digital and delivery to help it consolidate share in a recovery," the analyst said. Goldman is also bullish on Regeneron Pharmceuticals , which is advancing two potential treatments for the coronavirus. For Uber, the bank believes the increased demand for food delivery will offset a slowdown in travel and commuting.

A trader works on the floor of the New York Stock Exchange (NYSE) after the opening bell of the trading session in New York, U.S., March 13, 2020.

Lucas Jackson | Reuters

(This story is for CNBC Pro subscribers only.)

The stock market rebounded sharply this week amid rising optimism that the coronavirus pandemic is improving. Still, many investors are skeptical the worst of the outbreak is behind us and the economic recovery would be an immediate upswing.

Goldman Sachs is advising clients to focus on two buckets of stocks in the short term: one group poised to outperform even if the widespread shutdowns are extended and one group slated to recover quickly once the virus is contained.