These economic recovery plays still have more room to run, Barclays says

Published Fri, Nov 27 20208:07 AM ESTUpdated Fri, Nov 27 202011:31 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). Positive news about Covid-19 vaccine candidates has helped fuel a rally in reopening plays in recent weeks, but some names are still undervalued, according to Barclays. The firm combed through its basket of stocks where Covid-19 had been a short-term negative and identified the names where valuations are the lowest relative to recent history. Barclays said in a note that these beaten-down stocks "could outperform in an economic recovery as things normalize." Barclays is bullish on the market overall next year, projecting the S & P 500 to reach the 4,000 level , an increase of 10% from where the index closed Wednesday. Part of Barclays' reasoning is a better-than-expected earnings recovery and the rollout of a vaccine, which should boost recovery stocks. The only bank on Barclay's recovery list was Citibank . Banking stocks could see a boost during an economic recovery, which could calm worries about customer defaults and lead to rising interest rates. Citi''s shares have lost about 30% this year, a much sharper decline than JPMorgan's stock has suffered. Insurance name Allstate also made the list. Earlier this month, Barclays initiated coverage of property and casualty insurance stocks, and it gave Allstate an overweight rating. "Allstate's strong franchise tends to get overshadowed by its dwindling market share to direct writers. We are constructive that a transformation is under way through concurrent business model updates and M & A," the firm said in a note. Barclays' price target of $107 per share is about 3% above where the stock closed on Wednesday. One company that should benefit from a widespread vaccine is food distributor Sysco . The company took a big hit with more Americans eating at home with schools and offices closed, and its sales were down 23% year over year in its most recent quarter . Sysco's stock price reflects those struggles. The shares are down 15% for the year. Another company that needs public spaces to reopen is mall owner Simon Property Group . The retail real estate stock has lost more than 41% this year. Simon is still being aggressive despite the hit from the pandemic, agreeing to buy rival Taubman Centers for a reduced price .

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(This story is for CNBC Pro subscribers only).

Positive news about Covid-19 vaccine candidates has helped fuel a rally in reopening plays in recent weeks, but some names are still undervalued, according to Barclays.

The firm combed through its basket of stocks where Covid-19 had been a short-term negative and identified the names where valuations are the lowest relative to recent history. Barclays said in a note that these beaten-down stocks "could outperform in an economic recovery as things normalize."