President Trump has acknowledged that there may be more deaths from the coronavirus outbreak but the economy needs to reopen or else it would impact people in many other ways like drug overdoses and suicides.

An increasing number of states are expected to reopen their economies in the first two weeks of May. New York, in particular, aims to ease restrictions on manufacturers, builders and certain retailers in the near term. California too will permit apparel stores, bookstores and flower stores to reopen for curbside pickup as soon as this week.

But such moves are a huge gamble given that tens of thousands are infected by the pandemic, and things are getting worse by the day. Needless to say, stay-at-home orders did flatten the curve in hotspots like New York and California. However, though the economy is set to reopen, it’s going to be an uphill to get back to business as usual.

One thing that is for sure is that the spread of the infection won’t subside anytime soon and it won’t be a V-shaped economic recovery, as some analysts were predicting.

With social distancing measures likely to stay even after the economy reopens, restaurants may begin business with limited seating capacity. Few people will be going to theme parts or book air tickets. And sports events will likely be conducted without spectators, or at least with very few in attendance. What’s more, lesser number of people will be willing to go to work after having realized the time value of working from home.

Though the situation will be far from normal, there are stocks that will flourish once the economy reopens. Take a look –

Abbott Laboratories

As the world waits for a coronavirus vaccine, reopening of the economy is majorly depends on rampant testing. In other words, a simple blood test will be conducted to recognize individuals who have recovered from the virus. And Abbott Laboratories (ABT – Free Report) is in the forefront of this initiative. Needless to say, the company will be conducting tests, both before and throughout the reopening process of the economy.

Notably, the company has launched two COVID-19 tests — the ID NOW COVID-19 molecular test and the RealTime SARS-CoV-2 molecular test — which run on Abbott’s m2000 RealTime System in hospitals and laboratories.

But its not that testing is the only driver for Abbott Laboratories. The company’s branded generics and international diabetes businesses continue to drive growth, and new product launches and acquisitions should boost revenues in the near future.

The company has also been in the limelight for development in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre System. The company’s expected earnings growth rate for the next year is a superb 28.5%. In fact, the company’s projected earnings growth rate for the next five years is a steady 8.1%.

Eldorado Resorts

Eldorado Resorts, Inc. (ERI – Free Report) is a casino entertainment company. It provides casino and entertainment services, primarily in Nevada and Louisiana, United States.

Admittedly, casinos may be the last to open in the U.S. economy. But once the casino business starts to operate, it should provide a nice boost to Eldorado Resorts.

To top it, Eldorado Resorts is about to buy Caesars Entertainment Corporation to gain access to the latter’s network of sports books in nearly 29 U.S. casinos.

Eldorado Resorts’ expected earnings growth rate for the current quarter and year is 79.2% and 24.5%, respectively. The company’s projected earnings growth rate for the next year is also a promising 62.8%.

Apple

Things were not looking up for Apple Inc. (AAPL – Free Report) at the beginning of this year. Apple had to close all 42 of its stores in China due to the coronavirus outbreak. As a result, the company’s revenues were impacted in the March quarter. After all, the iPhone maker is heavily dependent on Chinese factories and consumers.

Apple also assembles products in China. For instance, a Taiwanese company named Foxconn makes iPhones and other gadgets on behalf of Apple. However, concerns regarding the impact of the virus on the global economy and subsequently on corporate profits have been escalating.

Recently, Beijing reopened its economy and Apple stores are up and running in China. Similarly, investors can rest assured that Apple will be the first one to open stores once the U.S. economy reopens.

However, the story of Apple is beyond iPhones. The company is doing strong business in its services division. Apple’s second-quarter fiscal 2020 results reflected continued momentum in the Services segment, driven by robust performance of App Store, Apple Music, Video, cloud services and App Store search ad businesses.

The company’s expected earnings growth rate for the current and next year is 2.9% and 24.5%, respectively. Projected earnings growth rate for the next five years is 10.7%.

Abbott Laboratories, Eldorado Resorts and Apple have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Author: Tirthankar Chakraborty

Source: Zacks: 3 Stocks Set to Pop Once the Economy Gets Back to Business

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