These 'Covid reversal' stocks are likely to outperform amid positive vaccine news, says Jefferies

A pedestrian wearing a protective mask walks past a Citibank branch in New York on Friday, April 10, 2020.

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Jefferies is calling for a "Covid reversal" in 2021, highlighting the shift from outperforming megacap tech stocks to beaten down value stocks suppressed by the pandemic.

With several vaccines in late-stage trials or waiting for FDA approval, investors are gearing up for a bounce back in normal consumer activity, which should help the economy rebound.

"Momentum dominated for most of 2020 while value underperformed severely leading to extreme crowding in megacap tech. However, since the positive news on vaccine, a reversal is underway," Jefferies strategist Desh Peramunetilleke told clients.