The reopening is gaining steam and these stocks may soon rally because of it, analysts say

Published Sat, Apr 10 20219:17 AM EDT

The Wall Street rally may be slowing down a bit but the economic rebound continues , and analysts said this week there are still a slew of high-quality stocks that investors should add to their portfolios. The reopening presents a unique buying opportunity, according to analysts. CNBC Pro combed through Wall Street research to find some of the top recovery stocks to own right now. They include Linde , Starbucks , JBT Technologies , Dave & Buster's and Dell. Starbucks Shares of the coffee giant were recently upgraded to a buy from neutral as the "recovery gains steam," BTIG analyst Peter Saleh said in a note to clients. In addition, the firm raised its second-quarter estimates on the back of the newly passed stimulus and maintained its street high price target of $130 per share. "The combination of unfolding economic recovery, earnings upside and broad geographic profile leads us to become more positive on shares and upgrade accordingly," he wrote. Saleh added that he expects younger consumers to soon come out in full force with their newly minted stimulus money. "We expect these younger cohorts flush with stimulus cash to venture out in the coming weeks, complementing the sales benefit from older cohorts who already been vaccinated," he said. With China sales strong and leading the way, there's more even more upside for the stock, Saleh added. "We believe that prior momentum is returning as coronavirus disruption fades and customer mobility returns, setting up a strong sales and earnings recovery outlook over the coming quarters, the firm said. Shares finished the week up over 3%. Linde The multinational chemical and gas company could be a key beneficiary of any new infrastructure legislation, according to Wells Fargo analyst Michael Sison. In particular, the firm sees what it called a "green premium emerging" led by the company's numerous hydrogen projects. "We remain bullish on the long-term prospects for hydrogen, given its role in enabling net zero emissions by 2050, which should require a significant amount of infrastructure to achieve," he said. Sison added that double-digit earnings growth is perfectly achievable for a company like Linde with an "industrial recovery to drive upside." And the green projects could be a "catalyst for a multiple rerating" of the stock this year, he wrote. The company's guidance has also been conservative, leading Sison to believe a series of beats and raises is on the horizon in 2021 as the economy improves. "We also see the next leg of growth driven by new announcements in the hydrogen/green energy infrastructure buildout, which we expect will be a significant long-term growth driver which is yet to be reflected in current valuations," Sison said. Shares of the company are up over 8% this year. Dave & Buster's Meanwhile, shares of Dave & Buster's are up almost 47% this year, but Raymond James analyst Brian Vaccaro said he sees the stock at an attractive entry point. The entertainment and restaurant company is coming off better than expected earnings last week, beating on revenue and earnings per share. The "recovery gains steam," Vaccaro said in his post-earnings note to clients. Like many companies, Dave & Buster's was forced to temporarily close many stores due to the coronavirus. But Vaccaro said the company's impressive earnings report shows it's on the right track. The firm cited "strengthening" quarter-to-date sales and cost savings realized during the pandemic. In addition, the firm said it was bullish on the company's potential sports betting partnership which it said could be a "positive catalyst." "We are slightly raising our already Street high estimates and see further upside in shares...." he wrote. JBT Corporation—William Blair, Overweight rating "Recovery gains steam. …. Our Outperform rating is based on our belief that JBT has a unique growth profile for an industrial company; favorable industry trends in both segments, margin expansion, growing aftermarket, and M & A activity should support double-digit growth in EPS for the next few years. Our Outperform rating is based on the following key attributes: 1) a solid growth outlook and favorable fundamental backdrop and trends, 2) a recurring revenue profile, 3) an accretive industry consolidation strategy." Dave & Buster's—Raymond James, Strong buy rating "Recovery gaining steam quarter to date. …. We reiterate our Strong Buy rating on PLAY following last night's 4Q release that include a 4Q sales/EBITDA beat, material strengthening in quarter to date sales trends, & quantification of cost savings realized during COVID supporting EBITDA margins ~200 bp above '19 levels at similar average unit volumes. Management continues to negotiate a potential sports wagering partnership, which could be a positive catalyst over the next few months. We are slightly raising our already Street high estimates & see further upside in the shares." Dell Technologies—Deutsche Bank, Buy rating "Our pick for an enterprise IT spending recovery. …. DELL shares have outperformed its IT hardware peers YTD, but we believe its shares will continue to outperform as IT spending recovers as we go through this calendar year. We believe management's full-year guidance for revenue growth and operating margins could end up being too conservative, as DELL should see a nice uptick in enterprise-driven businesses in 2H CY21, while its relatively low exposure to consumer-driven businesses should help limit the downside should work-from-home benefits reverse. Linde—Wells Fargo, Overweight rating "Industrial recovery to drive upside. We believe the Company is capable of double digit earnings growth consistently, should see a stronger recovery in 2021E where we raise our outlook and longer term will benefit from potential of hydrogen as clean fuel. …. We also see the next leg of growth driven by new announcements in the hydrogen/green energy infrastructure buildout, which we expect will be a significant long-term growth driver which is yet to be reflected in current valuations. Potential green premium emerging." Starbucks—BTIG, Buy rating "Raising 2QF21 Estimates as recovery gains steam. …. The combination of unfolding economic recovery, earnings upside & broad geographic profile leads us to become more positive on shares & upgrade accordingly. …. We expect these younger cohorts flush with stimulus cash to venture out in the coming weeks, complementing the sales benefit from older cohorts who already been vaccinated. …. We believe that prior momentum is returning as coronavirus disruption fades & customer mobility returns, setting up strong sales & earnings recovery outlook over the coming quarters.

Signage is displayed in the middle of a air hockey table at a Dave & Buster's Entertainment location in Pelham, New York.

Timothy Fadek | Bloomberg | Getty Images

The reopening presents a unique buying opportunity, according to analysts.

CNBC Pro combed through Wall Street research to find some of the top recovery stocks to own right now.