JPMorgan says growth will re-accelerate, stop worrying and buy these recovery stocks

Published Wed, Sep 15 202110:58 AM EDTUpdated Wed, Sep 15 202111:55 AM EDT

JPMorgan is bullish on the the economic recovery from the pandemic and it lists some U.S. stocks that it says will benefit from the boom. "Despite concerns about the recent downshift in economic and business cycle momentum, we remain confident that strong growth lies ahead and activity is bound to re-accelerate," JPMorgan's chief U.S. equity strategist, Dubravko Lakos-Bujas, told clients. The last few months have been filled with concerns about the Covid delta variant and government stimulus unwinding, weakness in the labor market and waning consumer sentiment. The S & P 500 has been range bound due to these worries, yet the index is about 2% from its record high. However, JPMorgan said the slowdown is temporary. "We see these risks as well-flagged and in some cases overdone," Lakos-Bujas said. The Wall Street firm is remaining positive on the broader market this year and next, estimating the S & P 500 reaches 4,700 by January and surpasses 5,000 by the end of 2022. "As long as Covid continues to ease, strong momentum should continue into 2022 as businesses start to rebuild depleted inventories and ramp-up capex from historically depressed levels," said Lakos-Bujas. To take advantage of the expected economic momentum, JPMorgan designed a basket of stocks that could benefit from the reopening. JPMorgan screened for S & P 500 companies that became considerably cheaper during the pandemic compared with the pre-Covid period based on their value composite score. This score considers factors that include analysts' ratings, price-to-forward-earnings, price-to-book-value and price to sales. The list is then filtered to select only domestic candidates based on their revenue exposure. Take a look at the stocks here. JPMorgan's list is full of the industries hardest hit by the pandemic, like airlines, casino stocks and retailers. The firm has positive sales and earnings growth expectations for the group. Industrials United Rentals and Southwest Airlines earned spots, as well as General Motors , Lennar and MGM Resorts International. TJX Companies , Gap and Ulta Beauty are among retailers on the list. Financials PNC Financial and Bank of America are included in the basket, as well as real estate company Duke Realty . Planet Fitness and CarMax also earned spots on JPMorgan's list. — with reporting from CNBC's Michael Bloom.

A Southwest Airlines flight logo is seen as the plane taxis to a gate at Long Island MacArthur Airport in Ronkonkoma, New York on March 25, 2021.

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JPMorgan is bullish on the the economic recovery from the pandemic and it lists some U.S. stocks that it says will benefit from the boom.