These 5 Stocks Are Bouncing Back from Their Pandemic Lows
There are plenty of stocks that completely took a bath in 2020, thanks to the pandemic. Nearly every sector of the stock market took a hit as investors tried to wrap their heads around a historic, global pandemic that had the potential to send world economies into a tailspin.
Fortunately, some of the worst economic predictions didn’t come true, but it still left many companies—and their share prices—reeling last year.
Thankfully, some of these companies are getting back on track in 2021 and have seen their share prices bounce back from their pandemic lows.
Not all of the companies listed below are completely out of the woods just yet, but their recent progress is certainly notable, as is their ability to weather one of the worst-case scenarios for many of their industries.
5 Stocks Bouncing Back from Their Pandemic Lows
These 5 stocks are showing signs of strong recovery since their pandemic lows.
Delta Air Lines Inc. (NYSE: DAL)
- Delta Air Lines (NYSE:DAL)
- Price: $40.99 (as of close Oct 15, 2021)
- Market Cap: $26.143B
If one sector was pummeled more than any other… it was the airlines. Lockdowns kept people from leaving their hometowns, let alone flying to far-off destinations. And social distancing ensured that being confined to a small space with strangers 30,000 feet above the ground was the last thing people wanted to do.
Because of these unforeseen circumstances, Delta (and all other airlines) essentially grounded their entire fleet and put them in storage for months.
The result? Delta’s business entirely dried up. The company lost $11 billion in the first two quarters of the year and warned at the time that a recovery could take two years or more. The company’s stock tumbled because of its poor financial performance and by mid-2020, Delta’s share price was down an astonishing 52%.
But the company has since begun rebounding as vaccines have been rolled out across the world and people are traveling again. In the company’s June quarter, the company had positive free cash flow and was profitable in the month of June on a pre-tax basis.
Delta’s CEO Ed Bastian told investors that domestic leisure travel had fully recovered to 2019 levels and there are “encouraging signs of improvement in business and international travel.” In fact, the company said it ordered more jets to expand its capacity.
So has all of that translated to better performance from Delta’s share price? You bet it has. The airline’s stock is up 46% over the past 12 months.
Booking Holdings (Nasdaq: BKNG)
- Booking Holdings (NASDAQ:BKNG)
- Price: $2538.34 (as of close Oct 15, 2021)
- Market Cap: $104.224B
Booking is a mammoth company that comprises some of the most popular travel-focused companies across the globe, including Priceline.com, KAYAK, OpenTable, Rentalcars.com, and its namesake Booking.com.
Needless to say, the pandemic was not good for any of the company’s businesses. The company’s CEO, Glenn Fogel, said in early 2020 that the COVID-19 pandemic “is without a doubt, the biggest disruption in modern global travel, the world has ever seen.”
Of course, he was right. In 2020, Booking’s net income tumbled 99% and hotel room night bookings fell by 58%.
Booking’s share price consequently took a major hit, sliding by 23% in the first six months of 2020.
But there are lots of signs that Booking is in the midst of a rebound, with more good news on the way. Over the summer of 2021, the company had more hotel night bookings than it did over the same period in 2019.
And while Booking is still feeling the effects of the pandemic, Fogel said recently that the company had “another quarter of meaningful sequential improvement” and that it expects its third-quarter 2021 revenue as a percentage of gross bookings to be in line with the third quarter of 2019.
Alright, so people are booking a lot more rooms than they did in 2020, and Booking’s business is on the mend. But how exactly has that translated to the company’s stock price?
Over the past 12 months, Booking’s stock has gained more than 42%, easily outperforming the S&P 500’s 28% climb.
AutoZone (NYSE: AZO)
- AutoZone (NYSE:AZO)
- Price: $1736.03 (as of close Oct 15, 2021)
- Market Cap: $36.696B
AutoZone is a bit of an outlier on this list because the company actually grew during the pandemic.
A mixture of lockdowns and social distancing, paired with an influx of cash from stimulus checks, spurred some people to buy parts for their cars. That led to AutoZone’s sales increasing 6.5% in fiscal 2020 and net income popping 7%.
So, why even put AutoZone on this list? Because even while the company grew during the pandemic… its share price fizzled. AutoZone’s stock was down about 5% in the first six months of 2020, which was slightly worse than the S&P 500’s performance at the time.
But even though AutoZone’s financials were technically good in 2020, it has an even more significant post-pandemic opportunity.
In case you haven’t noticed, new and used car prices are through the roof right now thanks to global supply chain issues, particularly for semiconductors. The lack of inventory for autos will likely keep people holding onto their older cars longer, and could help keep AutoZone’s revenue trending higher.
Investors are starting to catch on to this idea and AutoZone’s stock has spiked 41% over the past 12 months. And there could be more growth ahead for the company.
On its recent quarterly earnings call, AutoZone CEO William Rhodes said that management is “encouraged with the current sales environment” and the company “exited the fiscal year with strong fundamentals in our business.”
Those strong fundamentals include total sales that climbed nearly 16% in fiscal 2021, along with a very impressive 25% spike in net income.
While the pandemic is still causing a lot of uncertainty in some sectors, it’s crystal clear that AutoZone was able to tap into increasing auto parts demand and that the current inventory constraints for new cars should keep the company’s business humming along nicely as the economy continues to recover.
Where to invest $500 right now
Before you buy Amazon, or Netflix, or Apple, consider this…
The team at Motley Fool first recommended each of those stocks more than a dozen years ago!
- They discovered Netflix for $1.85 per share, back in the days of DVDs by mail.
- And recommended Amazon at $15.31 in 2002, before most people were comfortable using credit cards online.
- And even hit Apple at $4.97 per share, about a month before the release of the very first iPhone.
Check out where those stocks are today. The bottom line: a $500 investment in all three of these stocks would be worth more than $200,000 today!
And here’s why that’s important: The Motley Fool’s flagship investing service Stock Advisor just announced their top 10 “best buys now” across the entire stock market. Whether you’re starting with $100, $500, or more, you’ll want to get the full details!
Bank of America Corporation (NYSE: BAC)
- Bank of America (NYSE:BAC)
- Price: $46.37 (as of close Oct 15, 2021)
- Market Cap: $382.146B
Banks can be riskier stocks during tough economic times because their business is built on people and companies borrowing money. When recessions come along, borrowing slows down and banks typically lose business.
So when investors realized that the effects of the pandemic would bring a recession in the United States and many other countries, some of them fled from Bank of America’s stock. As a result, the company’s share price tumbled 33% in the first half of 2020.
But Bank of America rode out the year relatively well, with the bank generating $17.9 billion in net income in 2020. And the company mostly appears to be back on track as the U.S. economy has significantly bounced back from its slowdown in 2020.
This is all great news for Bank of America, and the company is already seeing the benefits of the turnaround.
In the second quarter of 2021, Bank of America’s CEO Brian Moynihan said that “Consumer spending has significantly surpassed pre-pandemic levels, deposit growth is strong, and loan levels have begun to grow.”
While some of Bank of America’s financials haven’t completely rebounded (its revenue was down 4% year-over-year in the second quarter), the company is still on track to continue benefiting from a strong economic recovery.
And that’s led investors back to Bank of America, resulting in an eye-popping 77% share price increase over the past 12 months.
Walt Disney Co. (NYSE: DIS)
- Walt Disney (NYSE:DIS)
- Price: $176.46 (as of close Oct 15, 2021)
- Market Cap: $320.65B
Disney’s stock was in the doldrums for most of 2020 and it’s no surprise why: Disney had to halt the production of its television shows and movies during the height of the pandemic, shutter its theme parks, and keep its cruise ships in port.
The result was a 45% decline in Disney’s operating profit in fiscal 2020.
But former CEO Bob Iger said on the company’s second-quarter 2020 earnings call that, “The Walt Disney Company has demonstrated repeatedly over its nearly 100-year history that it is exceptionally resilient and I believe this time will be no different.”
And he was right. While Disney’s stock fell 23% in the first six months of 2020, it’s made a huge comeback recently, rising nearly 40% over the past 12 months.
While Disney experienced a major setback to nearly all of its businesses last year, the company’s Disney+ streaming service was the one bright spot. The service now has 116 million subscribers less than two years after it launched.
With all of Disney’s theme parks now open, a massive 18-month long 50th-anniversary celebration of Walt Disney World underway, and most of its cruise ships back on the open seas, Disney is clearly on track for a major post-pandemic rebound.