These stocks could benefit most if Democrats control Congress

Published Wed, Jan 6 20218:21 AM ESTUpdated Wed, Jan 6 202111:48 AM EST

(This story is only for CNBC Pro subscribers ) Investors on Wednesday rotated in and out of certain stocks amid ongoing results of two Senate runoff races in Georgia showing Democrats outperforming. Analysts across Wall Street rushed to advise clients on how best to adjust their portfolios if Democrats were to gain control of Congress. Citi analyst Anthony Pettinari struck an upbeat tone on the outlook for the stocks under his purview and told clients that a blue Congress could muscle through long-awaited infrastructure spending. "As infrastructure is one issue with relatively high bipartisan support, there is a lower bar for getting something done compared to other issue areas," Pettinari wrote in a note. Citi highlighted construction materials names including Vulcan and Martin Marietta , as well as Summit Materials , Eagle Materials and Forterra as a handful of stocks that could see upside if Democrats win control of the Senate. Vulcan, Martin Marietta and Summit rallied 4.3%, 4.2% and 3.2%, respectively, in premarket trading Wednesday. "Discussions with political consultants in our recent virtual DC field trip suggest that if Democrats ultimately win both run-off seats in GA, prospects for a bulked-up infrastructure bill are much more likely than strong action on other Democratic priorities (climate change, tax rates, etc.)," Pettinari said. In industrials, Pattinari likes Aecom , Jacobs Engineering and Fluor , three engineering companies that could benefit from government jobs if a large-scale infrastructure bill becomes law. As of Wednesday morning, NBC News projected that Democrat Rev. Raphael Warnock beat Republican Sen. Kelly Loeffler in the first of the two runoffs. The second Senate race, between Democrat Jon Ossoff and incumbent David Perdue , remained too close to call. Clean energy Clean-energy analysts have long argued that an all-Democratic Congress could lead to a spike in renewable energy stocks. Goldman Sachs, for example, told clients earlier in the week that the brokerage remains bullish on solar stocks despite a banner 2020. Simmons Energy, a division of Piper Sandler, noted on Monday that a Democratic sweep in the Georgia runoffs means that President-elect Joe Biden's energy plan could be more expansive but still kept in check by a sizable Republican bloc. "Given the broad latitude the President has with foreign policy, we believe it is likely that a Biden Administration will incorporate climate considerations into treaties and trade agreements (i.e., imposing tariffs on goods produced from substantial carbon emitting countries that are not adequately addressing climate concerns)," wrote analyst Pearce Hammond. "However, the Biden administration will likely run into congressional challenges on some oil and gas issues, such as any overtures to ban leasing on federal lands," the analyst added. For now, Simmons Energy recommends investors pick up shares of NextEra Energy , a Juno Beach, Florida-based renewable energy company. First Solar , a popular solar energy stock that has rallied 65% over the last 12 months, gained more than 6% in premarket trading. The Invesco Solar ETF (TAN) jumped 5% in premarket trading. Health Care A Democratic sweep would also bode well for Medicaid and public exchange businesses as they could see more business from expanded coverage and better state funding, Bernstein told clients on Wednesday. "We would expect 1) increased state and Medicaid funding tied to COVID/recession; 2) a modestly larger expansion of safety net coverage programs; 3) efforts to address drug prices, although likely short of direct negotiations and price setting; and 4) increased corporate taxes," analyst Lance Wilkes wrote. Wilkes added that Centene and Anthem could both outperform under a Biden administration and unified Congress given their exposure to Medicaid spending. The analyst advised investors to stay away from CVS Health and Cigna , given a growing focus on potential drug pricing reform. — CNBC's Michael Bloom contributed reporting.

Sergio Hernandez works on the median just east of the new I-25 interchange in Castle Rock, Colorado.

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(This story is only for CNBC Pro subscribers)

Investors on Wednesday rotated in and out of certain stocks amid ongoing results of two Senate runoff races in Georgia showing Democrats outperforming.

Analysts across Wall Street rushed to advise clients on how best to adjust their portfolios if Democrats were to gain control of Congress.

Citi analyst Anthony Pettinari struck an upbeat tone on the outlook for the stocks under his purview and told clients that a blue Congress could muscle through long-awaited infrastructure spending.

"As infrastructure is one issue with relatively high bipartisan support, there is a lower bar for getting something done compared to other issue areas," Pettinari wrote in a note.