(Bloomberg) — Lipstick, 5G phone networks and childcare centers provide some examples of how the coronavirus is altering consumer behavior, according to an analysis of investments by Morgan Stanley for life after the pandemic.
The findings were detailed over more than 90 pages in a report from analysts, economists and strategists in the New York bank’s research department. Here’s a selection:
The crisis is accelerating trends in American housing that were already underway, including the expansion of single-family homes, according to Richard Hill. The analyst recommends Invitation Homes Inc. for its high-quality assets and says these types of real-estate investment trusts can beat the performance of apartments.
With people trapped indoors, stress eating is on the rise. Firms with meditation podcasting — WW International Inc. and Peloton Interactive Inc. — could benefit as more people embrace alternative diets and work out at home, Brian Nowak and Lauren Cassel wrote.
Technology spending at banks will need to ramp up, in particular, on security. With more staff working from home, they can shrink corporate real estate and pump more money into front-end technology interfaces for their customers, according to analysts including Betsy Graseck.
Construction & Transport
Fewer commuters will mean less expenditure on transport. This may, in turn, reduce expectations for public construction spending by about $100 billion by 2022, the analysts wrote. This will negatively impact Caterpillar Inc. and REV Group Inc., which could also suffer from a drop in office and hotels construction stemming from reduced business travel.
The thirst for ever faster Internet connections will speed up the transition to 5G technologies. CommScope Holding Inc. and Ciena Corp. are well placed to benefit as well as optical component manufacturers, such as Lumentum Holdings Inc.
Analyst Dara Mohsenian expects higher growth in consumption at home as more people spend time in their houses due to lingering unemployment and limited budgets to eat out. A study of the previous U.S. recession showed packaged foods rose, while current trends saw a decline in throat spray, makeup remover and lipstick — products often used when people socialize.
Working from home may prompt more parents to move their kids away from on-site corporate centers toward neighborhood locations, a potential negative for Bright Horizons Family Solutions.
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