These stocks could soon see a boom due to 'significant pent-up demand,' analysts say

Published Sat, Mar 27 20218:27 AM EDT

The economic reopening is underway, and Wall Street analysts said this week there's a big group of stocks just waiting to break out. With fresh stimulus and consumer spending set to take off, these companies will be prime beneficiaries, analysts say. CNBC Pro combed through the top Wall Street research to find the biggest winners of the reopening. They include Texas Roadhouse, Uber, Bumble, Carnival, Gap and Ralph Lauren. Texas Roadhouse The steak-themed chain restaurant was hit hard by the pandemic, but the company is well-positioned to rebound due to "significant pent-up demand," according to BTIG analyst Peter Saleh. "We view Texas Roadhouse as one of the most compelling casual dining concepts with consistent industry-leading sales, superior unit economics and considerable long-term unit potential," he wrote in a note this week. The firm also raised its price target on the stock to a Street high of $109 per share from $92 and said it expects Texas Roadhouse to return to pre-pandemic sales later this year. Saleh cited aggressive pricing and labor management changes as key factors in the firm's bullish call on the stock. "This combination of compelling long-term potential with a stronger near-term margin and earnings outlook underlies our Buy rating," he said. The company is also coming off the recent passing of its CEO and founder, Kent Taylor, but Saleh assured shareholders that the restaurant chain has the right leadership to keep things on track. Shares of the company are up more than 7% this month. Uber The recovery continues at Uber, according to Rob Sanderson, managing director at Loop Capital. "We see a material rebound in the rideshare business building as vaccine distribution expands, and early consumer behavior is suggesting significant pent-up demand," he said this week. Even though demand in the near term remains what he called "mixed," Sanderson said clients should stick with the stock. Trends in the U.S. are "improving" and "the rest of the world has been the leading the recovery for Uber to date," he said. In addition, the ride-sharing company has spent considerable capital diversifying the business. "Uber has made acquisitions and investments to expand deliveries in promising new verticals including groceries, alcohol, pharmaceuticals and others," Sanderson said. This should be an advantage to Uber over its competition as well, he wrote. Sanderson, who also raised his price target to $69 from $61, concluded that putting it all together it appears Uber is well on its way to achieving "positive overall EBITDA by 3Q," he added. Shares of the company are up over 7% this year. Bumble Bumble beat revenue estimates in its first quarterly report as a public company, but its shares are down 7% over the last month. Jefferies analyst Brent Thill said in a recent note to clients that there's a lot to like about the stock in the months ahead. The firm also raised its price target to a Street high of $82 per share and said the "positive buzz" surrounding the quarterly earnings should comfort shareholders. "The Q4 print was mostly in-line, but we believe BMBL gained outsized market share in dating," Thill said. In particular the firm said it sees more top-line growth upside, especially as pandemic restrictions ease. "We believe investors will be impressed with BMBL's rare balance of rev growth and profitability especially given the opportunity for further improvement in FY21," said Thill. Even though the company is investing heavily, Thill said he believes the company's wide array of products should be enough to keep the stock working. "While we do expect some EBITDA margin contraction due to investments in international markets and relaunched brand marketing campaigns, we believe rev growth should handily beat initial guidance given significant pent-up demand for dating," he wrote. Bumble - Jefferies, Buy rating "Positive buzz 1st quarter out of hive. … The Q4 print was mostly in-line, but we believe BMBL gained outsized market share in dating. … We believe investors will be impressed with BMBL's rare balance of rev growth and profitability, especially given the opportunity for further improvement in FY21. … While we do expect some EBITDA margin contraction due to investments in international markets and relaunched brand marketing campaigns, we believe rev growth should handily beat initial guidance given significant pent-up demand for dating." Carnival - UBS, Buy rating "We are updating our cruise outlook and upgrading CCL to a Buy, keeping RCL at a Buy and NCLH at a Neutral. While the near-term outlook has gotten worse, with continued delays in restart, the longer-term outlook has improved as vaccines become more widespread than what we originally factored into our estimates last year. … We expect to see pent-up demand for leisure travel generally, since leisure travel is not yet able to be replaced by a Zoom — and cruising is pure leisure travel." Disney - JPMorgan, Overweight rating "DIS has managed revenue losses from the parks better than expected in our view, and in many ways optimized the period of closure and limited capacity by making notable advancements in operations and consumer experiences, suggesting Disney's parks can ultimately emerge from this crisis in a stronger position than pre-pandemic." "As losses continue to shrink faster than initially projected and evidence of pent-up demand builds, we are increasingly encouraged by both the intermediate & long-term prospects of this historically sizeable contributor to Disney's profits." Ralph Lauren & Gap - Wells Fargo, Overweight ratings "We have returned to our survey work to get a better sense of the shape of the 2021 retail recovery, and what a post-pandemic retail landscape looks like. … When asked which categories they are most likely to return to first post-pandemic, respondents most frequently selected make-up/beauty, even surpassing going-out apparel, suggesting that these categories are most likely to benefit from pent-up demand this year as pandemic dynamics ease. In our view, this bodes extremely well for names like ULTA, URBN, RL and GPS in our space." Texas Roadhouse - BTIG, Buy rating "We are raising our price target on TXRH shares to $109 from $92 as we expect the company will benefit from significant pent-up demand. … We view TXRH as one of the most compelling casual dining concepts with consistent industry-leading sales, superior unit economics & considerable long-term unit potential. … This combination of compelling long-term potential with a stronger near-term margin & earnings outlook underlies our Buy rating. Uber - Loop, Buy rating "We see a material rebound in the rideshare business building as vaccine distribution expands & early consumer behavior is suggesting significant pent-up demand. Despite continued investment in take-out & other delivery businesses, we expect the company will turn to positive overall EBITDA by 3Q. … Near-term rideshare demand trends remain mixed. … The U.S. is clearly turning and [the rest of the world] has been leading the recovery. … Uber has made acquisitions and investments to expand deliveries in promising new verticals including groceries, alcohol, pharmaceuticals & others."

A woman enters a Texas Roadhouse restaurant in Arvada, Colorado, on Friday, March 11, 2011.

Matthew Staver | Bloomberg | Getty Images

The economic reopening is underway, and Wall Street analysts said this week there's a big group of stocks just waiting to break out.

With fresh stimulus and consumer spending set to take off, these companies will be prime beneficiaries, analysts say.

CNBC Pro combed through the top Wall Street research to find the biggest winners of the reopening.