These cheap U.S.-focused stocks could thrive as rest of the globe deals with stagflation, Barclays says

Published Mon, Mar 14 202212:57 PM EDTUpdated Mon, Mar 14 20221:13 PM EDT

As the Russia-Ukraine conflict triggers fears of a "stagflationary shock " around the world, Barclays' analysts say some U.S. stocks could thrive as growing energy costs punish overseas markets, especially in Europe. Rising oil prices have severely affected countries that rely on Russian exports for their energy needs, particularly in Europe, where depressed productivity set off investor concerns of a stagflationary environment. A country experiencing stagflation deals with growing inflation and high unemployment at the same time. "Soaring commodity prices and increased risk aversion caused by the Russia-Ukraine war imply a stagflationary shock for the global economy, and Europe looks more vulnerable than the U.S.," Barclays noted in a report Sunday. U.S. stocks have suffered to a lesser extent than their European counterparts. In the past month, the France CAC 40 index and the German Dax index are off more than 7%. In comparison, the S & P 500 is down nearly 5% over the same period. For investors, that represents a buying opportunity in U.S.-based stocks that are more insulated from higher energy costs. All stocks in the screen generate at least 90% of their revenues in North America, the report said. All were given an overweight rating by Barclays, with at least 10% upside to their current price targets. Here are 10 stocks that could benefit in a stagflationary environment: The firm gave telecom giant T-Mobile a price target of $150, which is about 20% higher than where the stock was trading on Monday. Shares for the company are up more than 8% for the year. Energy utilities firm PG & E was given a $16 price target representing roughly 47% upside from where the stock traded Monday. Year-to-date, the firm's stock price is down more than 8%. Consumer discretionary firms underperformed other sectors this month, but several U.S.-based brands will benefit from a stagflationary environment. Restaurant operator Bloomin' Brands , which manages Outback Steakhouse, was issued a price target with roughly 42% upside from shares trading Monday. The company is down nearly 3% year to date. Other consumer discretionary firms that are forecast to swing back include automobile parts company Aptiv Plc and home products retailer Williams-Sonoma . Barclays also highlighted pharmaceutical firm Bausch Health Companies , giving it a price target of $31, which marks roughly 39% upside. Shares for the firm are down nearly 20% year-to-date. — CNBC's Michael Bloom contributed to this report.

A T-Mobile store in San Francisco, California, U.S.

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